Approximately 90% of businesses are using cloud computing in some form, and 82% of them use more than one cloud service. These figures are rising year-on-year. With cloud solutions available for so many areas of a business, some businesses are already going ‘full cloud’—using cloud servers for all of their programs, services and data storage.

But is this safe? Can a business really run on cloud alone without opening itself up to new and unknown risks? We look at each area of a business the cloud may be used for, and whether or not it is secure.


Financial figures and bank details may well be the most sensitive data any company has, so handling them on a cloud-based program seems risky. Despite this, startups and small businesses in particular are increasingly favouring a cloud-based solution for their accounting tasks. The benefits of cloud-based accounting for startups include the real-time tracking of financial data and cash flow, and the easy management of client information.

But are these benefits worth the risks?

As it happens, most experts say there are no risks. Or at least no more risks than there are associated with non-cloud accounting. According to The Guardian, cloud servers face the same security issues as local servers. Either of these could be hacked; neither is more vulnerable to the other. Xero argues that using a cloud system can actually be more secure for accounting, as it allows for agencies and businesses to work together in a safer way. Through cloud accounting platforms such as Xero, accountants can send invites to companies, allowing them to view and assess their finances, through a system that is safer than sending emails.

Data backup

Cloud accounting may be safe, but what about data backup? Backing up data is one of the cloud’s primary functions, and it is crucial to the survival of many companies.

According to a disaster recovery study, 40% of businesses that suffer a critical IT failure close within a year. This is often due to loss of client and business data. One way to avoid this worst-case scenario is through restoring your business’ data from a backup.

Companies can backup and encrypt their data on an external hard drive or, of course, on the cloud. However, a detailed survey revealed that data recovery from the cloud can sometimes fail.

Fortunately enough for cloud users, cloud backups are no more likely to become lost or corrupted than hard drives. PC World examined three leading cloud backup services and found them to be just as secure as local backups if users take requisite precautions.
Encrypting files with your own password is one key tip, as it means even if someone hacks the cloud server, they cannot access the files. The downside of this, and perhaps the cause of recovery failure for some businesses, is that if you forget the password, the data is encrypted forever.

File storage

Storing files is slightly different than backing them up. Whereas backups, cloud or not, can be encrypted for maximum security, regular files need to be easily accessible to employees for daily use.

Offline file storage involves using local programs such as Word or Excel, and saving finished documents to a local hard drive or network. Cloud file storage is nearly the same, but an off-site server accessed over the internet takes the place of the local one.

Cloud storage providers like Google, Dropbox and Microsoft are in charge of your files’ safety if you use them. There is little you can do to make a difference on your end. Alphr recommends using a two-step security process whenever possible to ensure no one breaches these platforms. As their article points out, the user, not the storage provider, is the weakest link when it comes to cloud security.

If employees create strong passwords, there should be no problem with cloud file storage—and it can actually make collaboration with other employees easier as documents can be accessed by multiple users across platforms over the cloud, and even sent to clients in cloud form.