The Risks and Benefits of Cloud Storage

Denise Sullivan
By Denise Sullivan
— Last Updated: 2020-07-06T14:18:55+00:00

As the cloud becomes more popular, meeting not only storage but computing needs, it is understandable to see businesses gaining an interest in utilizing this powerful tool. As with every new piece of technology, consumers have a reason to be suspicious.

Trusting a third-party with sensitive data is a big risk, especially for corporations (large or small). There are many risks, but also several benefits to cloud storage.

Determining the usefulness of something means taking a close look at the risks involved. All new forms of technology have some pitfalls, and the cloud is not immune. Before running out and choosing a provider, administrators need to consider the following:

Weighing the Risks

Administrators who are considering utilizing cloud storage solutions should also be aware that they will have to spend time and energy finding the right company.  Sometimes risks are not just due to the new and unproven technology. Other times, it is because of an inadequate management or research of the said technology.

Top ten major risks
Cloud Risks

As security is a very big risk for companies, business customers will benefit from using a vendor that allows them to maintain their own encryption keys, rather than having the cloud storage provider retain the information.

Additionally, security risks can be limited by pre-encryption of files before transferring them to the cloud storage location. This step can help ensure sensitive information cannot be accessed by anyone other than the authorized user.

  • Data will be in the hands of a third-party. Security measures should be examined prior to selecting a vendor

  • Cloud service providers seem to spring up overnight, and a few fade away just as quickly. In this event, all data could be lost if it is not backed up somewhere trustworthy.

  • Most cloud service providers are reliable, however, they are only as reliable as the users’ Internet connection. Having a poor Internet connection can keep businesses from being able to access data to collaborate on documentation.

  • Rising costs can also be a risk if the corporation does not plan efficiently. Extensive research should be done prior to selecting a vendor to ensure scalability and that costs will remain reasonable. For instance, some providers offer up to 5TB online storage for a decent price, but you may need more.

  • Companies also risk not having their data stored in compliance with federal regulations if the physical storage location resides in a different country. Security laws vary from country to country, making it important for administrators to understand where their information is residing.


Understanding the Benefits

While there are several potential risks in utilizing cloud storage services, enterprise consumers can enjoy different benefits as well. These benefits are not just limited to storage of files. They can include helping a company work more efficiently.

Cloud Computing
Cloud Computing

Having a cloud storage provider can help the company have a disaster recovery plan in place. While it probably will not be the only a portion of the overall recovery protocol, it can be a useful tool to help get the company get back on its feet in the event of a natural disaster or system meltdown. Companies who archive their information in an off-site location do not have to worry as much about potential natural disasters.

In the event of a fire, flood, or tornado, as the information  is not located onsite, it will be accessible and safe even if the company building has been damaged. Once repairs are made, administrators can retrieve the information via the Internet and restore their servers to working order. 

While cost can be a risk, it can also be a benefit. Instead of having to purchase and maintain hardware in order to backup all the systems, that cost is absorbed by someone else. The company will only pay a subscription fee which will help the provider offset these costs. Businesses can actually save money by allowing someone else to maintain their storage facility.

When it comes to making the company work more efficiently, the cloud offers the benefit of anywhere access. Documents and data can be accessed via the Internet from any location, allowing employees to work abroad or at home if necessary.

The same technology also allows employees to work together on a project, saving time and endless email revisions. Many enterprise level cloud storage providers offer tools that will allow workers to collaborate on documents at the same time even if they are not at the same location. Managers can also monitor work using the same tools.

Security concerns can make the cloud sound like a risk. However, there are also some security benefits to using the cloud. These include:

  • Most cloud providers offer 128 or 256 bit AES encryption.

  • Anywhere, anytime accessibility (depending on your Internet connection)

  • Cloud providers have a redundancy in place to ensure files are not corrupted due to lack of access

  • Cloud storage providers have security in place to ensure a physical site is secure, whereas external hard drives and USB drives are susceptible to theft

Making a Successful Move to the Cloud

Utilizing new technologies does come with a risk, however, with adequate research and understanding, many of these problems can be avoided. IT administrators should take plenty of time to research potential vendors prior to making any commitments.


Areas that should be monitored include reliability, security, and location. In order for a cloud storage solution to be successful for an enterprise-level consumer, a few areas should be considered prior to selecting a vendor.

  • Cloud storage management must be a priority 
  • Ensure good security measures to save sensitive data
  • Location of cloud storage providers’ physical servers
  • Scalability of service to ensure enough storage space


By taking time to weigh the risks and benefits of cloud storage solutions, companies can find a service or product that will work best for them. This is not something that should be taken lightly and all of the risks should be understood prior to purchasing a subscription.

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While the cloud offers many convenient and useful tools to help businesses grow, it is something that should be studied and researched before making a commitment.