Editor’s note: This post comes from our Constant Contact UK office. You can view all the posts from our UK team here. Or connect with us on Facebook and Twitter.

These days it’s almost impossible to complete the working week without some reference to ‘the cloud’. It’s the undisputed buzzword of the moment. But what is the cloud? How does it work? And what does it mean for your business? Here’s a quick introduction.

The cloud in two paragraphs..

The cloud is actually a metaphor for the internet. When you hear people talking about ‘storing files in the cloud’, those files are being stored (or backed up) online rather than on a local hard drive. In a nutshell the cloud is about accessing programs and data over the internet, rather than locally on your computer.

Some examples? Social networks like Twitter and Instagram are hosted in the cloud. The cloud is where all those YouTube videos are kept. Storage services like Dropbox and SugarSync store files in the cloud. And Constant Contact is digital marketing software that you access online — in the cloud. No chunky programs to install on your computer. No CDs in your disc drive. The heavy lifting is done through the world wide web.

Where is the cloud and how big is it?

Compaq engineers coined the term for the cloud in 1996. Since then it’s been easy to think of the cloud as some ethereal, intangible ‘something’ in the sky. The reality is rather different. The cloud is actually a huge network of computers, hard drives and servers — housed in giant warehouses across the world. It’s these data centres that store the information of the digital world.

The scale of these facilities is mind-boggling. Next year the largest data centre ever is due to open in China. With 6.3 million square feet of floor space, it will be big enough to house 110 football pitches. Just picture 110 football pitches, filled with towers of connected hard drives. And this is just one of hundreds of data centres around the world.

Back in 2012 Mozy calculated that the cloud stored 600 exabytes of data — that’s 600 billion gigabytes. Sounds like a lot, doesn’t it? Well given that data is thought to be doubling every three years, today the cloud is probably holding something closer to 1200 exabytes of data. And it’s not going to slow down anytime soon.

Every year more hard drives are manufactured than the previous year — and they are capable of holding more data. The upshot is that the capacity of the cloud is as good as infinite. And while the bandwidth of 1990’s internet didn’t facilitate cloud computing, today you can access your files in a flash — even if they are being stored on a hard drive on the other side of the world.

The cloud is convenient…

The cloud is all about convenience. It allows you to access your working world anywhere, anytime and on any device. All you need is an internet connection. That means you can work from home, a client’s office or your favourite café – with no strain on your own infrastructure. (No more slow performance when your hard drive is full.) It also means you can access your favourite software platforms without any installation files. All you need is a web browser and your working world is at your fingertips. Simple, nimble and — for most businesses – cost-effective.

…but the cloud has risks too

The first and most important issue is data ownership. Once you create a file or store data in the cloud, does it belong to you or your service provider? Terms of service agreements can be pretty abstract. The next thing to consider is access. Whether you are using cloud storage or cloud software, you are putting your faith in your providers to be available when you need them.

Of course, access is a two-way thing. To make sure your data is never lost in the event of a server outage or a hard drive failure, many cloud providers make duplicates of your files. All well and good, you might think, until you want to make sure sensitive information is deleted. Completely deleted. The fate of your data depends on your provider removing the backup files.

That brings us to the final issue: security. All cloud providers have robust security measures in place to keep your data safe from hackers. But nothing is foolproof. Once your data is in the cloud, you rely on the security of your provider, rather than your own. Thankfully there are ways to give your business an extra level of protection.

Bring an extra level of security to your cloud activities

Encrypting your data doesn’t always require a black belt in computer science. The folks behind Reset The Net have curated a suite of free software that will help cloud users bring extra privacy to their online activities. Take a look here.

Let’s wrap this up…

Cloud computing is becoming so ubiquitous that it’s difficult for small businesses to avoid. And why should you? There are some convincing benefits, including flexibility, efficiency and infrastructure savings. The key to success is to manage the risks. If your data is highly confidential it might be best to back it up on an external hard drive, rather than the cloud. For other data, free encryption tools will give you a layer of protection that many small businesses lack.

The risk of data breaches is small — but it pays to expect the unexpected.