Businesses are increasingly turning to the cloud to help improve efficiency and productivity. In fact, it's expected that nearly 80 percent of small businesses (those with fewer than 50 employees) will fully adapt to the cloud by 2020, according to Emergent Research and Intuit's Small Business Success in the Cloud report. That's up from 37 percent in 2014. But cloud-computing issues like service interruption threaten to throw your business off balance. Here's what you need to know — and what you can do to protect yourself.

About the Cloud

The cloud is an offsite network of servers that performs the functions typically handled by a local server in the office. It handles activities like running applications, storing records, backing up data, hosting email services and much more.

Potential Benefits of Cloud Computing

The appeal of cloud computing comes from its potential benefits. For example:

  • More robust security protocols for data stored in the cloud than what many businesses have in place.
  • Flexibility to buy more or less capacity as business needs change. This helps accommodate fluctuations resulting from new business opportunities or peak seasons. Plus, you're only paying for what you need.
  • Efficiency gains, as businesses may be able to spend less on servers, software and IT resources without impacting IT service delivery to the business.
  • Greater accessibility, as files stored in the cloud can be retrieved and worked on by employees at any time. Gone are the days when work couldn't move forward because a file was saved on the computer of an employee who was unexpectedly out of work.

The Dark Side of the Cloud

Picture this: The vendor hosting your cloud-based website has a software glitch, causing your website to go down for several hours. During that time, you're unable to accept online orders — those orders go to a competitor.

So, while cloud computing is revolutionizing how companies operate, no solution is perfect. In a recent study of business cloud users:

  • 48 percent said their organization has experienced an interruption in cloud service.
  • 56 percent of those businesses reported that at least one of these interruptions prevented their company from even functioning.

An interruption in cloud service could cause a business to lose sales, impacting their income. Help protect your business with business insurance that includes cloud service interruption coverage. It can help protect your business from risks like this by replacing lost business income if you need to suspend operations due to an unannounced and unplanned interruption in your cloud service, regardless of the reason for interruption.

As many as 40 percent of small businesses never reopen following a disaster, according to the Federal Emergency Management Agency (FEMA). For a more robust defense against a potential business issue, create a disaster recovery plan for your business in case the unexpected strikes.

A cloud service interruption — or something worse — can happen because of a software glitch or a natural disaster. Be sure you have the right plans, protocols and coverage in place to protect your business from these and other cloud-computing issues.

Read more about protecting your business from a data breach and the risks of using technology for your business.

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