Why Small Businesses Are Moving to the Cloud
If you're running a small business in the UK, you've probably heard plenty about "the cloud" by now. But between the jargon and the sales pitches, it can be hard to figure out what's actually useful for a business your size—and what's just expensive overkill.
Here's the simple truth: cloud computing has become genuinely affordable and practical for small businesses. You don't need an IT department or a massive budget to benefit from it. In fact, for many small businesses, cloud services can actually save money compared to traditional IT setups.
This guide cuts through the noise and shows you exactly how to use cloud services effectively without overspending.
What "The Cloud" Actually Means for Your Business
Let's start with the basics. When we talk about cloud computing, we simply mean using software and storing data on servers run by someone else, rather than on computers in your office.
Instead of buying expensive software and installing it on every computer, you pay a monthly subscription and access it through the internet. Instead of maintaining your own server (or that old PC in the corner that nobody dares turn off), your files live securely in professional data centres.
For a small business, this typically means:
- **Email and calendars** through services like Microsoft 365 or Google Workspace
- **File storage and sharing** through OneDrive, Google Drive, or Dropbox
- **Business software** like accounting packages (Xero, QuickBooks), CRM systems, and project management tools
- **Your website** hosted on cloud servers rather than local hardware
The Real Costs: What You'll Actually Pay
Let's talk money. One of the biggest advantages of cloud services is predictable monthly costs instead of large upfront investments. Here's what typical small business cloud services cost in 2025:
**Email and Office Software**
- Microsoft 365 Business Basic: £4.90 per user/month
- Microsoft 365 Business Standard: £9.40 per user/month
- Google Workspace Business Starter: £5.20 per user/month
**File Storage**
- OneDrive (included with Microsoft 365)
- Google Drive (included with Google Workspace)
- Dropbox Business: from £10 per user/month
**Accounting Software**
- Xero Starter: £15/month
- QuickBooks Simple Start: £12/month
- FreeAgent: £14.50/month
**Website Hosting**
- Basic shared hosting: £3-10/month
- Managed WordPress: £15-30/month
- Shopify (for e-commerce): £25-65/month
For a typical five-person business, you're looking at roughly £50-150 per month for comprehensive cloud services. Compare that to the cost of buying server hardware, software licences, and paying someone to maintain it all.
Getting Started: The Essentials First
Don't try to move everything to the cloud at once. Start with the basics that'll make the biggest difference:
**Step 1: Email and Calendar**
If you're still using free email or a clunky old system, this is your first priority. Professional email (yourname@yourbusiness.co.uk) costs just a few pounds per month and includes calendar sharing, which makes scheduling meetings much easier.
Both Microsoft 365 and Google Workspace are excellent choices. Microsoft is better if your team uses Word and Excel heavily. Google works well if you prefer simpler tools and do lots of collaboration.
**Step 2: File Storage and Backup**
Get your important files off individual computers and into cloud storage. This protects you if a laptop gets stolen or a hard drive fails. It also makes it easy to work from anywhere and share files with colleagues.
Most email packages include generous storage. A five-person business on Microsoft 365 gets 1TB per person—more than enough for most small businesses.
**Step 3: Accounting Software**
Cloud accounting software like Xero or QuickBooks connects to your bank accounts, automates much of your bookkeeping, and makes life much easier at tax time. Your accountant can access it directly, saving you both time.
Avoiding Common Mistakes
Small businesses often make these cloud computing mistakes:
**Paying for features you don't need**
Enterprise plans come with advanced features most small businesses never use. Start with basic plans and upgrade only when you actually need more.
**Forgetting about internet reliability**
Cloud services need reliable internet. If your connection is patchy, consider a backup mobile broadband connection for critical times. Business broadband packages often include better support and service guarantees.
**Not training your team**
New tools are only useful if people actually use them properly. Budget time for training when you introduce new systems. Microsoft and Google both offer free training resources.
**Ignoring security basics**
Cloud services are generally very secure, but you need to do your part. Use strong, unique passwords. Turn on two-factor authentication. Be careful about phishing emails. We'll cover this more in the security section.
**Signing long contracts**
Many cloud services offer discounts for annual payment, but be cautious about multi-year commitments until you're sure the service works for you. Monthly billing gives you flexibility to change if something isn't working.
Security: Keeping Your Business Safe
Small businesses are increasingly targeted by cyber criminals, but cloud services can actually improve your security if you use them properly.
**Why cloud can be more secure**
Major cloud providers spend billions on security—far more than any small business could. They employ security experts, maintain up-to-date systems, and have robust backup procedures. Your data is often safer with them than on an old PC under someone's desk.
**What you need to do**
*Use strong passwords*: Every account should have a unique, complex password. Use a password manager like Bitwarden or 1Password to keep track of them.
*Enable two-factor authentication*: This means you need both your password and a code from your phone to log in. It stops most account hijacking attempts. Microsoft 365 and Google Workspace both include this for free.
*Be careful with sharing*: Cloud storage makes sharing easy, but make sure you're only sharing files with people who need them. Review sharing settings regularly.
*Watch for phishing*: The biggest security threat to small businesses is fake emails trying to steal passwords or install malware. Train your team to spot suspicious emails and verify unexpected requests.
Making the Switch: A Practical Timeline
Here's a realistic timeline for moving a small business to cloud services:
**Week 1-2: Planning**
- List all the software and services you currently use
- Identify what needs to move and what can stay
- Choose your cloud email provider and sign up for a trial
**Week 3-4: Email Migration**
- Set up your new email system
- Move existing emails and contacts
- Update your website and business cards with new email addresses
- Keep the old system running briefly in case anything was missed
**Week 5-6: File Storage**
- Set up cloud storage
- Move important files from local computers
- Establish folder structures and sharing rules
- Train team on how to save and share files
**Week 7-8: Additional Services**
- Set up accounting software and connect bank feeds
- Add any other tools you need (project management, CRM, etc.)
- Configure backups and verify everything is working
**Ongoing**
- Regular security reviews
- Training on new features as they're released
- Annual review of services to check you're still getting value
Getting Help When You Need It
You don't have to figure everything out yourself. Here are your options:
**IT support companies**: Many local IT firms specialise in supporting small businesses with cloud services. They can help with setup, ongoing support, and security. Expect to pay £50-100 per hour for ad-hoc support, or £20-50 per user per month for managed support.
**The providers themselves**: Microsoft, Google, and other major providers have support included in business subscriptions. Their documentation and help resources are generally excellent.
**Accountants**: For accounting software specifically, your accountant can often recommend and help set up cloud accounting packages. Many are certified partners for Xero, QuickBooks, or FreeAgent.
**Government resources**: The National Cyber Security Centre (NCSC) provides excellent free guidance on cyber security for small businesses. The Government's Help to Grow: Digital scheme offers funded support for digital adoption.
What's Coming Next
Cloud computing continues to evolve. Here's what small businesses should watch:
**AI-powered tools**: Services like Microsoft Copilot are bringing AI assistance to everyday business software. These can help with writing emails, analysing data, and automating routine tasks. Prices are still settling, but expect these to become more accessible.
**Better integration**: Cloud services are increasingly designed to work together seamlessly. Your accounting software talks to your bank, your CRM connects to your email, and everything shares data automatically.
**Simpler security**: Cloud providers are making security easier to manage, with better default settings and clearer guidance for small businesses.
The Bottom Line
Cloud computing isn't just for big companies anymore. For most small businesses, moving to cloud services saves money, improves security, and makes day-to-day work easier. The key is to start simple, focus on your actual needs, and avoid paying for features you won't use.
The best time to start was probably a few years ago. The second best time is now. Pick one area—email is usually the easiest starting point—and take that first step. You can always add more services as you get comfortable.