What is cloud-based file sharing and why are small businesses moving to it?

What is the “cloud”?

The cloud is changing the way businesses work – but what exactly is it? When we talk about “the cloud”, we’re referring to an online storage space where files are stored and shared. Remote servers are hosted on the internet and are used to store, manage and process data, meaning that data is stored online rather than on local computers or servers. So, when you’re using the cloud or cloud services, you’re using computer resources that are delivered via the internet rather than being stored on your own computer.

A big part of how businesses are using the cloud these days is through cloud-based file sharing, often done through cloud applications for small businesses. Let’s take a look at what cloud file sharing is, why SMEs are making the transition to the cloud, and whether your business should also make the move.

What is cloud-based file sharing?

Cloud-based file sharing is when users share files over the internet, rather than more traditional methods like email attachments or USB drives.

Traditional file sharing methods like email attachments and USB devices mean that files are stored locally on individual computers. But with cloud sharing, documents are stored on remote servers “in the cloud”, meaning they’re accessible from any device with an internet connection. Users can access files in the cloud either through a mobile application, web browser or a desktop application, and all changes are automatically synchronised across all devices. That means that different people can collaborate on the same document in real time, from any device in any location.

Some of the most popular cloud applications for business include Google Workspace (including Google Drive), Microsoft 365 (which includes OneDrive), Dropbox (a standalone file sharing platform) and Slack (a cloud-based messaging tool which allows file sharing), each with different storage capacities, security features, and integrations tailored to various business needs.

Why are more SMEs sharing files through the cloud?

An increasing number of SMEs are moving from desktop software to small business cloud applications.

But what’s driving this move to the cloud? The are several factors encouraging small businesses to step into the digital future with a shift to cloud-based computing and file sharing. Some of the most common reasons include:

• Remote and hybrid working

Although remote work has become the primary way of working for many businesses, some have now mandated that employees go back to the office.

When you have employees working from different places, it’s important that they’re still able to communicate and collaborate as effectively as if they were all in the office together. Cloud platforms enable this, allowing employees to access documents from anywhere with internet connectivity.

• Improved collaboration

When you store and share documents in the cloud, it means that multiple team members can work on them simultaneously, and they’ll update in real time. This reduces the confusion caused by asynchronous updates and multiple versions of the same file – as well as reducing the amount of time spent sending email attachments back and forth.

• Reduced cost

It can be expensive to host your own servers and IT infrastructure on your premises. Cloud solutions are a more cost-effective solution, especially for small businesses that need to keep costs down. Instead of large upfront investments in hardware and ongoing maintenance costs, you only need to pay a monthly subscription for whichever service you choose. That makes it much more affordable and predictable, as you know exactly what you'll pay each month without worrying about unexpected hardware failures or maintenance costs.

• Scalability

The ability to scale up or down is important for any small business. With traditional file servers, if you want to add extra storage, you need to purchase and install new hardware, which can take a while to do (as well as incurring a significant upfront cost). Switching to cloud-based file sharing means you can increase your storage capacity or add new users in just a few clicks, meaning you only ever need to pay for what you use.

• Automatic backup

Working in the cloud means that you have built-in backup and disaster recovery capabilities that would be expensive for small businesses to implement independently.

Your files are automatically saved and backed up in the cloud, meaning that if your computer crashes or is lost or stolen, you won’t lose any work. It’s typically also easy to retrieve old versions of your file, so if something is accidentally changed or deleted, all is not lost.

• Investment in security

Major cloud providers invest heavily in security measures, with measures including zero trust architecture (which takes the default position that no user can be trusted), access management (controlling who can view and edit specific files) and encryption (scrambling data so it can't be read if intercepted). This means that your files are protected both when they’re being stored in the cloud and when they’re being shared.

This means that cloud-based file sharing can be a good option for small businesses that might struggle to keep their own servers secure and up to date, making the cloud safer than storing documents on office computers or basic office servers.

What are the disadvantages of using cloud computing to share files?

Cloud-based business applications have a huge number of benefits for SMEs, but there are also some potential downsides to consider, including a dependency on strong internet, as well as a reliance on third-party servers, and the potential downtime and security risks that come with that.

• Outsourcing trust

One of the big benefits of working in the cloud is that employees can collaborate and share documents from anywhere. But if they use their own devices without proper security software or connect to unsecured public wi-fi, it could expose your business to security breaches as hackers could intercept data.

And while cloud providers typically have strong security measures in place, storing and sharing files in the cloud does mean that you’re putting your trust in a third party to protect your business information. Luckily, data breaches at major cloud providers like AWS, Google and Microsoft are rare. In most cases, security breaches happen because of user error rather than a failure in the cloud business application.

• Dependency on internet speed and connection

Cloud-based file sharing requires reliable internet connections. If your internet connection is slow, then it can be frustratingly time-consuming to upload large files to the cloud or share them with clients and colleagues.

• Service downtime

When cloud providers experience interruptions, entire teams may lose file access. Even brief outages can significantly impact time-sensitive operations. While major cloud applications generally have high uptime rates, technical issues can happen – which leaves your business completely dependent on your provider restoring service quickly. If you have files stored locally, you’d be able to continue working on them during internet downtime. But while some cloud applications allow you to work on files offline, you won’t be able to share them with others until full service is restored.

Should your SME move to cloud-based file sharing?

So, is cloud-based file sharing using cloud business applications right for your SME? It’s worthwhile asking yourself some questions to evaluate whether it’s the right for your business at this time:

• Are your employees working remotely? If you have a hybrid or remote set-up, cloud access is a non-negotiable for productivity and employee satisfaction.

• Do you struggle to keep on top of version control? Cloud applications can minimise this through real-time synchronisation and version history.

• Do your employees need to collaborate easily? Working in the cloud means multiple users can collaborate on documents simultaneously, wherever they’re located.

• How much time do you spend on file management? If your team spend a significant amount of time searching, sharing or backing up files, then a move to the cloud can significantly reduce the administrative burden through instant link sharing, automatic backups and centralised file organisation that makes it easier to find documents.

• How much are you currently spending on IT? Look at hardware, maintenance and staff costs, and compare these to the subscription fees of different cloud providers to help understand which is right for your business.

Grow your business with cloud-based file sharing

Cloud-based file sharing can be a sensible move for small businesses. It removes barriers to collaboration and can help employees to work more efficiently and productively, from anywhere. If you think you’re ready for a move to the cloud, then it's worth researching which platform best suits your business needs and budget. Start by evaluating your current file sharing challenges and comparing what different cloud business applications offer.