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Jonathan Edwards, managing director of Harrogate-based YorkshireCloud.co.uk, a cloud computing service tailored for SMEs, gives his tips on harnessing the power of the cloud.

1. Cloud computing is 100 per cent reliant on an internet connection, so you should always have a plan of what to do when your main connection fails. A cost effective method for smaller companies is to buy a 3G capable router and pay around £10 per month for a broadband dongle. For larger organisations, always have more than one internet connection.

2. Make sure you’re certain that all your company applications and software will work in the new cloud environment. Moving most of your IT into the cloud and then spending £8,000 on a new onsite server, because one of your applications doesn’t work, is a waste of time, money and effort.

3. Most people don’t know that cloud computing can be delivered using several different pieces of technology. These products have different pros and cons but more importantly, different pricing. SMEs can be more at risk of being talked into paying over the odds for wonderful technology that won’t be used. Make sure you receive clear and understandable advice on what’s best for your organisation.

4. More often than not, you will be charged per gigabyte of data that you host in the cloud. It is always best to cleanse your data before you migrate. You will probably find data that isn’t needed anymore or can be archived onto different media. As an entrepreneur, you might blur the boundaries between your company and home sometimes, but is your business’s server really the right place for your wedding video?

5. Cloud computing becomes a utility similar to your electricity and you pay for what you use. If you have ten users, you pay for ten users. Make sure you understand exactly what your tariff consists of. How much are you paying per gigabyte of data? You don’t want any nasty surprises at the month end.

6. If your current IT company lets you down, then you can hire another one. It’s not as easy in the cloud. Your provider holds all your data. Make sure you ask them how long it takes for them to respond to any problems and ask if they have an uptime guarantee. It should be 99 per cent. Anything less reliable could be crippling for a small business.

7. Six months after you’ve bought a new server for the office and replaced all your PCs isn’t the right time to make a move into the cloud. Consider cloud when your hardware and software are ageing and a refresh is needed.

8. Google and Microsoft are big cloud providers; but where is your data being kept? Somewhere in Europe or somewhere in the world is the best answer you’ll get. SMEs might consider opting for a cloud provider who can tell you exactly where your valuable company data is kept and even take you to the data centre if needed.

9. Cloud computing is a service. Don’t be forced into long contracts. There is absolutely no reason why you should be signing a three or five-year contract with your provider. You should be able to leave freely with a month’s notice.

10. Many cloud providers don’t provide IT support. As an SME, there will still inevitably be times when you need help with IT issues like printers or the internet connection in your office. Make sure you try and chose a provider who includes this in your monthly fees.

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Cloud computing is certainly attracting headlines in the media. You might have noticed Microsoft’s Cloud Power advertising blitz, or seen Apple’s Steve Jobs talking excitedly about iCloud. The trouble is that, for most companies, it’s hard to work out whether any of this hype is relevant to their business.

So is the cloud an option for you? As it happens, it is likely that your company already uses a cloud-based solution. If you subscribe to Hosted Exchange for your email, Online Backup for your critical files or a website hosting company, you already do so.

What’s new – for small and mid-sized companies at least – is the concept of replacing your old server (which often sits in a darkened corner of your offices) with a fully hosted alternative.

So what does that mean? Simply put, all of your software – from Microsoft Office to Sage to CRM – plus your files and data are stored in a data centre. No more servers at your offices. No more costly server upgrades every four of five years. No more Microsoft licence purchases for servers or PCs. Instead, you simply pay a fixed monthly fee per person, with zero set-up costs. You then just need a fast internet connection (plus a backup line in case the first one goes down).

Why are businesses considering this as an option? For many it comes down to money. During the downturn, most businesses reduced IT spending, often by deferring the replacement of their servers. Many of those servers are now suffering frequent failures or running slowly, affecting the ability of staff to work. Rather than simply replacing those ageing servers, companies are looking at whether a cloud alternative makes financial sense.

But there are other significant benefits too.

The amount of downtime when your employees cannot work because of a server failure is likely to be significantly reduced. Your company’s vital data will be more secure as it is stored at Tier 4 data centers. If you have staff that work regularly at home, at client sites or on the move, they can access everything they need to work without interruption or delay. Similarly, any business with multiple offices will avoid spending thousands on ensuring everyone can access the same files.

What about the downsides? Well, the cloud is definitely not right for every business. Design agencies, architects and video production companies are probably a non-starter. Likewise, if your internet line is chronically slow and a faster line is unavailable, the cloud is not for you.

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