If you’ve ever used an email account such as Gmail, downloaded an app to your smartphone, or streamed movies from Netflix, you’ve already taken advantage of the same technology that can help you run your business more safely and efficiently than ever before.

All of these activities are examples of cloud computing or, as tech-savvy folks call it, “the cloud.” Put simply, it’s the ability to access files through the Internet rather than via what you’ve saved directly to a computer’s hard drive. Files saved in the cloud can be stored anywhere in the world, and they’re available at a moment’s notice, provided—and this is key—you’re connected to the Internet. Cloud computing enables you to run your business with software that’s often cheaper and newer than what you’re using now. And your data generally is safer and easier to recover should disaster strike.

In 2009, only 2% of contractors used cloud computing for their business management applications, according to a study by FindAccountingSoftware.com, a service providing free software selection assistance. By 2013, the share of contractors turning to the cloud had jumped to 19%. Not surprisingly, over the past five years there’s been an uptick in the number of cloud-based software options specifically geared toward the construction industry. It’s a blessing for contractors who aren’t tech-savvy and don’t have access to an IT specialist, but who want to move their business-management functions to a computerized system while having someone else deal with the hassles of software downloads and upgrades.

The cloud’s real selling point is its storage reliability. “Hard drives fail,” says Aaron Dun, chief marketing officer with Intronis Cloud Backup and Recovery. “When a hard drive fails, the data stored on it is gone. If that’s the only place you stored the info, losing the data could potentially kill your company.”

While there are hard-drive recovery services available, they can be expensive and they don’t always work if too much damage has already occurred. Files stored in the cloud are still there if the hard drive goes bad, though for practical reasons you may want to keep two copies: one on your hard drive and the backup in the cloud.

Choosing the Right Cloud

Like real clouds, cloud computing comes in many forms. Before Robert Chandler, founder of cloud provider Cloud9 Real Time, advises clients on their options, he assesses the technologies they’re currently using. Someone who primarily does bookkeeping using a desktop computer is going to require different kinds of cloud computing from the person who relies on an iPad to show designs to a client. The number of people who will be accessing your company’s cloud also matters, in part because you almost certainly will need to share files. 

The best way to start picking a cloud service, Chandler says, is to talk to people you trust, including other small or independent business owners. “This is a situation where ‘hyper local’ works well,” Dun says. “Talk to your peers and find out what, if anything, they’re using and why.”

What's Free, What's Not

Services such as Dropbox, Google Drive, Amazon Cloud Drive, and Apple iCloud offer a limited amount of space at no cost. Applications like Evernote also provide free storage space while organizing the information you want to save. Such services often provide more storage and services in their “premium” packages (see list below). 

Cheap storage is a good start, but that’s also about all these services deliver, Chandler says. You may be out of luck if files are lost or corrupted. The free services are not always a backup service, either, because many of them create mirror files by making an image of the file saved on a hard drive. Yes, if you make changes on your office computer, the changes will be saved to the cloud. But if the hard drive where the original files are stored fails or is corrupted, your cloud files will become collateral damage.

There have also been security concerns with some of these services. As a result, they aren’t the best place to store documents with sensitive information, such as employee Social Security numbers or customer credit card numbers.

A step up from the premium packages is managed service providers (MSP). These are outside vendors that offer a variety of cloud services and IT-related support.

An MSP can create a more complete cloud environment that includes automatic backup services and disaster protection, website management, more expansive storage capabilities, and software. Perhaps most important, MSPs also provide IT support. However, you have to pay for each of these services, which can easily become cost-prohibitive. As Dun puts it, contractors make personal choices about the tools they purchase. Cloud services should be picked the same way.

Staying Secure

If you think security breaches are limited to large companies like Target, think again. One of the biggest misconceptions surrounding Internet use is that hackers only focus on big companies. The truth is that if you are logged on to a computer or device that connects to the Internet, you are at risk of being hacked. 

To avoid a data breach, it’s crucial to keep control of the security of your files stored in the cloud. If you use a free service, make sure that passwords are strong by using a mixture of upper- and lower-case letters, numbers, and symbols. If you use the cloud for file-sharing with your crew, make sure that they can’t access the personal or financial information of customers, the company, or other employees. When using an MSP, ask how it handles security, what steps are taken if the cloud is hacked into, and if the files are encrypted.

Technology changes work, but you needn’t feel overwhelmed by it, Chandler says. “Try one thing at a time and figure out how the cloud will work best for you.”

Questions to Ask Before Signing With a Cloud Provider

The cloud has proven itself to be a helpful tool for many contractors, but will it help your business? “You shouldn’t approach the cloud question as ‘Should I use the cloud?’” says Adam Bluemner, project specialist manager with FindAccountingSoftware.com, “but rather ‘What will best help us meet our needs?’”

The next question is: What functionality do you want to achieve with the cloud? Is it for storage and file-sharing only? Do you want specialized software services? Do you need a website or just want to send email?

If you choose a free cloud provider, read the fine print and service agreements.

If you choose an MSP, be sure to ask: Are backup services provided and how often do they occur? What are the security policies? What happens if a disaster takes down the server? How much storage is provided? And what happens if you cancel your contract?

Cloud Prices

There are a number of cloud storage providers. Here are the prices per gigabyte (gb) for some of the best-known ones:

  • Dropbox: 2 gb of space free, business plan is $15/month per user, up to 5 users, unlimited space
  • Amazon Cloud Drive: 5 gb of space free
  • Google Drive: 15 gb of space free, multiple storage plans beginning at 100 gb at $4.99/month
  • Apple iCloud: 5 gb of space free, 10 gb upgrade is $20/year
  • HP Cloud: Monthly storage costs 9 cents/gb, with additional fees for other services
  • Microsoft Windows Azure: Monthly storage is 7¢/gb, with additional fees for other services

—Sue Poremba is a freelance writer who lives in State College, Pa.