A storm of emerging technologies is poised to drench small businesses with a myriad of new ways of conducting business. 

Cloud computing, or computing across multiple servers, is the catch phrase du jour in the technology world and computing giants like Google (GOOG) and IBM (IBM) have taken notice. Companies have poured millions of dollars into the field as companies clamor to gain control of this rapidly expanding market. For small businesses cloud computing could mean cutting capital expenditures and boosting employee access to computer systems.

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Perhaps the most difficult question businesses face while grappling with how cloud computing fits into their business model is what they get from cloud computing.

Business owners can safely assume most cloud computing providers will differ from traditional providers in two key ways.

First, cloud providers store and process clients’ data on a various servers rather than just one. This array of servers, referred to as “the cloud” is stored at the provider’s datacenter and is shared by many companies.

Second, access to the data on the server, be it text documents or sales spreadsheets, is available to credentialed users from any location provided the user has access to the Internet. This differs tremendously from more traditional setups that are only accessible to computers within the company’s network. 

Small businesses often need to access applications that require a powerful technological infrastructure to function properly. Until the advent of cloud computing, they have been forced to either do without the technology or make a major fixed investment  to use it. Over time, businesses use the technology many times over, and the average cost of each use declines, partially offsetting the initial capital expenditure. Large businesses sometimes have a much easier time overcoming large capital costs solely because of the size of their operations.  

Perhaps the biggest draw to cloud computing is that it instantly enables businesses to bypass the often expensive process of investing in technology. 

“Let’s take something like event management," said Michael Miller author of Cloud Computing: Web-Based Applications That Change the Way You Work and Collaborate Online. 

"You have companies that are putting on huge seminars, and they need heavy duty powerful applications to manage all of the subscriptions. If you’re a company that is putting on a little conference with 20 attendees in the traditional software world you just can’t afford the software.In the cloud world you can afford the software, you can get access to the same technology the big guys do. Cloud computing puts a lot of power in your hands.”

Outsourcing computer resources to external providers across the Internet is nothing new. Cloud computing providers, however, suggest the novelty cloud computing provides is in its ability to spread tasks across the cloud or multiple computers. Spreading tasks across many computers, providers say, helps prevent access outages caused by single servers losing service. Additionally, they say, it allows for more efficient data processing.

Cloud computing also allows small businesses to upsize and downsize the scope of their operations as demand crests and ebbs without having to invest in the physical technological infrastructure, according to Rebecca Wettemann, vice president of Nucleus Research, a consultancy based in Wellesley, Mass. This too helps businesses avoid making hefty capital expenditures.

From a user standpoint the advantage from cloud computing is three-fold.   Since users can access the cloud from anywhere, they can in theory more efficiently work from home or while on business trips.  Additionally, since everything is stored within the cloud, instead of on a particular computer, users can collaborate in real-time. That is to say several users could edit a spreadsheet simultaneously rather than creating a plethora of confusing versions. Lastly, software updates, such as enhancements, can be rolled out to all users at once, instead of on a computer-by-computer basis, according to Wettemann. 

Still there are risks associated with cloud computing. Consider a highly publicized Aug. 11 outage of Gmail, Google's cloud computing e-mail service. Many users reported that they were completely locked out of their e-mail service for several hours during the middle of a business day. 

“Given the amount of my digital life that is stored at Google, [the outage is] a wake-up call.” wrote Mashable.com blogger Mark Hopkins.

Gmail product manager Todd Jackson issued a mea culpa on the “Gmail Blog” for the outage, saying “We feel your pain, and we're sorry.” However, this incident clearly raises questions about whether cloud computing is yet safe enough for businesses to rely on. 

Gartner, a consultancy based in Stamford, Conn, said in a study published in June 2008 the best way to gauge the strength and security of a cloud provider is by using a third party to perform a thorough analysis. The analyst would hypothetically consider the security of the systems, the data center where the systems are stored and agreements, called Service Level Agreements, which dictate the compensation a company receives if the provider’s services are inaccessible.

“When you do your comparison,” Miller said, “you better have a good spreadsheet.”