What is cloud security? Benefits and tips for business

Published Wednesday 1 April 2026

Table of contents

• What is the cloud?
• Five key benefits of cloud computing
• How is the data stored?
• Five key ways you can make your data more secure
• Train your staff about online safety and good security practices
• Keep your data safe in the cloud
• FAQs on cloud security

Key takeaways

• Implement strong password practices by using at least 12 characters or passphrases of 20-30 characters, making each password unique for every application, and using password manager software to generate and store secure login details.
• Enable multi-factor authentication on all cloud accounts to add a second layer of security beyond passwords, as this prevents unauthorised access even if someone steals your login credentials.
• Protect all business devices with updated anti-malware software and train staff to recognise phishing emails and social engineering attempts, as 74% of security breaches result from human error rather than cloud technology flaws.
• Monitor login activity regularly in your cloud applications to spot suspicious access from unfamiliar locations or times, and report any unusual activity to your provider immediately.

What is the cloud?

The cloud refers to data and applications stored online rather than on your computer's hard drive. Instead of installing software from a CD-ROM and saving files locally, you access programs and information through the internet from remote servers.

A decade ago, software ran directly from your computer's hard drive. Now, faster internet speeds and lower storage costs mean most applications run online from remote servers, and your data is stored there too.

Businesses worldwide are moving to the cloud for good reason, with research showing that a majority of executives believe cloud computing improves security. This guide explains the key benefits of cloud computing, how providers store and protect your data, and practical steps you can take to keep your business data secure.

Five key benefits of cloud computing

Cloud computing gives small businesses enterprise-level technology without the enterprise-level costs. Here are five key benefits:

1. Lower IT costs with a better experience

Cloud applications handle software upgrades, patches, and backups automatically, saving you time and IT support costs. You pay an affordable monthly subscription instead of a large upfront expense, and experienced professionals manage the technical work for you.

2. Faster updates

Cloud software updates automatically, so you always have the latest features and security fixes. No waiting a year for the next version or manually installing patches.

3. Access from anywhere at any time

Cloud applications work on any device with an internet connection, whether you're using a laptop, phone, or tablet. Access your software and data from the office, home, or on the go.

4. Better business continuity

Cloud-based businesses recover from disasters in hours, not weeks. Power outages, fires, floods, or theft can destroy on-site data. With cloud storage, your data stays safe on remote servers and you can get back to work quickly.

5. Greater agility

Cloud systems integrate with each other, letting your data flow automatically between applications. For example, Xero's cloud accounting software can connect with your point-of-sale system so sales totals, stock orders, and customer data sync without manual entry. You serve customers better and adapt faster.

How is the data stored?

Cloud providers store your data on servers in secure data centres, managing and monitoring them around the clock. Professional cloud providers use multiple layers of protection to keep your information safe.

Data encryption protects your information during transfer. Your device encrypts your data before sending it to the server, and encrypts it again when it returns. This prevents anyone from intercepting what's being sent or received.

Cloud software companies invest heavily in security. However, data breaches can still happen, with one 2024 report finding cloud security incidents affected 61% of organisations, often due to how people use the cloud rather than the cloud itself. You can take steps to prevent most security issues.

Five key ways you can make your data more secure

Most cloud security breaches happen because of how people use the cloud, not the cloud itself, with 74% of information security officers agreeing that human error is their top cybersecurity risk. High-profile hacking cases often involve weak passwords, phishing attacks, or human error rather than flaws in cloud technology.

Here are five ways to protect your business data:

1. Use secure passwords

Weak passwords are a primary vulnerability, causing over 80% of organisational breaches. Avoid using personal information like pet names, birthdays, or children's names, as these are easy to guess.

Strong passwords should be:

• long: at least 12 characters, which takes 62 trillion times longer to crack than a 6-character one, or use a passphrase of 20–30 characters
• random: avoid dictionary words and predictable patterns
• unique: use a different password for each application

Password manager software stores all your login details securely, helping users avoid the tendency to use unsecured methods like memorisation or written notes. You only need to remember one master password, and the software generates strong, unique passwords for each account.

2. Use multi-factor authentication

Multi-factor authentication (MFA) adds a second layer of security beyond your password. Also called two-factor authentication or two-step verification, MFA requires you to verify your identity using something you have (like a code sent to your phone) or something unique to you (like your fingerprint).

Even if someone steals your password, they can't access your account without this second factor, yet a 2024 report found that 61% of organisations have at least one root account owner without MFA.

3. Monitor login activity

Many cloud applications show you when and where someone last accessed your account. Check this information regularly. If you spot a login from an unfamiliar location or time, report it to your provider immediately.

Review your cloud software's security settings and enable any available monitoring features. These tools help you catch suspicious activity early.

4. Use anti-malware software

Malware is malicious software that can steal your passwords, credit card details, and other sensitive data; a specific type known as an infostealer was used in 24% of cyber incidents in 2024. It typically spreads through suspicious email links, attachments, or unsecured websites.

Protect your devices by:

• installing anti-malware software on every device you use for business, including phones and tablets
• keeping software updated so you have the latest security patches
• avoiding suspicious links and attachments in emails from unknown senders
• downloading software only from reputable sources, as fake anti-malware programs can actually be malware in disguise

Use a tool like virustotal.com to check files before opening them if you're unsure.

5. Recognise phishing and social engineering

Phishing uses fake emails to trick you into clicking malicious links or sharing sensitive information, preying on what one report calls the non-malicious human element involved in 68% of breaches. Social engineering uses phone calls or messages to manipulate you into revealing passwords or other data.

Common warning signs include:

• unexpected requests for passwords or login details
• urgent messages pressuring you to act quickly
• emails from unfamiliar senders with links or attachments
• phone calls claiming to be from IT support asking for access

These attacks target people, not technology. The same risks apply whether you store your data in the cloud or on-site, but cloud data is actually harder to physically steal than a laptop or USB drive.

Train your staff about online safety and good security practices

Staff training is essential for cloud security, particularly as breaches from internal threats have increased significantly, now accounting for 35% of incidents. Your team should know how to create secure passwords, recognise phishing attempts, and follow data security best practices.

Every business needs a data security policy. Resources like Get Safe Online can help you create one, or consult a security professional for guidance tailored to your business.

Keep your data safe in the cloud

Cloud storage can be more secure than keeping data on your own premises. You benefit from professional security management, automatic backups, and faster disaster recovery.

However, security depends on how you use the cloud. Protect your business by:

• using strong, unique passwords for each application
• enabling multi-factor authentication wherever available
• installing anti-malware software on all devices
• training staff to recognise phishing and social engineering
• creating a data security policy for your business
• complying with data protection laws in your region

FAQs on cloud security

Here are answers to common questions about cloud security for small businesses.

What do you mean by cloud security?

Cloud security refers to the policies, controls, and technologies that protect your data, applications, and infrastructure you store in cloud environments. It includes encryption, access controls, and monitoring to keep your business information safe.

What are the main pillars of cloud security?

The key pillars of cloud security include identity and access management (controlling who can access your data), data encryption (protecting information in transit and at rest), network security (preventing unauthorised access), and compliance and governance (meeting regulatory requirements).

Is cloud storage safer than keeping data on my computer?

Cloud storage is often more secure than local storage for small businesses. Professional cloud providers invest in security infrastructure, automatic backups, and 24/7 monitoring that most small businesses can't afford to maintain themselves. The main risks come from weak passwords and phishing attacks, not the cloud technology itself.

What should I look for in a secure cloud provider?

Look for providers that offer data encryption, multi-factor authentication, regular security audits, and compliance certifications relevant to your industry. Check where the provider will store your data and review their data protection policies.

Who is responsible for cloud security?

You and your cloud provider share responsibility for cloud security. Your cloud provider secures the infrastructure, servers, and network. You're responsible for securing your accounts, choosing strong passwords, training staff, and controlling who has access to your data.