Cloud computing: advantages and disadvantages

By Adam Niazi FCCA ยท Last updated 12 October 2026

Cloud computing means using software, storage and servers over the internet instead of on your own machines. Advantages: lower upfront cost, easy scaling, access anywhere, collaboration and built-in backup. Disadvantages: reliance on the provider and internet, data security and regulatory concerns, and lock-in.

Advantages and disadvantages

Advantages

  • On-demand access and data sharing from anywhere
  • Self-service and flexibility
  • Collaboration tools (for example Dropbox, Google Drive)
  • Scale up or down quickly
  • Less maintenance; automatic updates
  • Backup and disaster recovery
  • Often better security than in-house

Limitations

  • Reliance on the provider and the internet
  • Regulatory risk over where data is held
  • Data sharing and privacy concerns
  • Security weaknesses if poorly set up
  • Lock-in and rising costs

Service models

ModelYou getYou manageExamples
IaaSServers, storage, networksOperating systems, apps, dataAWS EC2, Microsoft Azure VMs
PaaSA platform to build and run appsYour apps and dataGoogle App Engine, Heroku
SaaSFinished softwareUsers and dataMicrosoft 365, Xero, Salesforce

Deployment models

ModelBest for
PublicMost businesses: low cost, high scale
PrivateHighly regulated or sensitive data
HybridKeeping sensitive data private while using public cloud for the rest
CommunityGroups with shared needs, such as public bodies

Controls when moving to the cloud

  • Due diligence on the provider: security certifications, financial strength.
  • A clear service level agreement: uptime, support, exit terms.
  • Know where data is stored, and meet UK GDPR.
  • Strong access controls and multi-factor authentication.
  • An exit plan to avoid lock-in.

Cloud computing in ACCA SBL

Cloud sits in technology and data analytics (syllabus area E). A typical task asks whether an organisation should move its systems to the cloud. Weigh cost, flexibility and resilience against security, regulation and dependence, then recommend controls. For Historic Places (March 2025 pre-seen), a cloud ticketing and membership system could cope with summer peaks without buying servers.

FAQs

What are the advantages of cloud computing?

Lower upfront cost, pay as you go, easy scaling, access from anywhere, easier collaboration, automatic updates, less maintenance, and built-in backup and disaster recovery.

What are the disadvantages of cloud computing?

Dependence on the provider and internet connection, data security and privacy concerns, regulatory issues over where data is stored, possible lock-in, and costs that can grow with use.

What are IaaS, PaaS and SaaS?

Infrastructure as a Service (renting servers and storage, such as AWS EC2), Platform as a Service (a ready platform to build apps on) and Software as a Service (ready-to-use software, such as Microsoft 365 or Xero).

What are the cloud deployment models?

Public (shared provider infrastructure), private (used by one organisation), hybrid (a mix) and community (shared by organisations with similar needs).

Is the cloud secure?

Major providers invest heavily in security, often more than a small firm could. But security is shared: the customer is still responsible for access controls, settings and its data.