Just about every small business owner, and anyone else for that matter, has been hearing a lot about “the cloud” lately.

 Internet behemoths like Google, Apple and Amazon are fighting it out for cloud superiority, as are other giant tech companies like Oracle and Microsoft. While the concept of delivering applications over the Internet is simple, it is revolutionizing the way hardware and software are sold.

Take computer backup, for example.  The old way of backing up computers was to purchase an external hard drive and a software program, install the software, physically connect your computer to the hardware, then run the software program.  If you had a laptop, you needed to make sure you continued to connect your computer to the external drive. And if you were traveling, the only way to keep your backup current was to haul the drive along with you. 

With cloud backup, you don’t purchase any hardware or software.  Instead, you subscribe to a backup service over the Internet, download a lightweight app, and your computer data is securely backed up over the Internet to a server which is safely and securely housed at the backup provider’s data center.  The backup runs in the background and the only thing you need to connect to your computer is the Internet, which we’re pretty sure you’re doing already.   

Backup is just one service moving to the cloud.  Everything from accounting software to fax service to phone service is now available over the Internet. All of these new cloud services have a few common advantages over their traditional counterparts of which small business owners should take note:

Simple set up: With cloud services, there’s usually no hardware to buy and install and if any software is needed (often it’s not), it’s just a quick and easy download.

Lower cost: With no hardware to buy and maintain, it only makes sense that cloud services cost less than doing it the old-fashioned way.  And technologies like online meeting services can allow you to deliver presentations remotely, saving a bundle on travel costs. 

Ease of access: Since cloud services are delivered over the Internet, they’re also available anywhere you have an Internet connection.  Waiting for a crucial fax but out of the office? No problem — the fax can be forwarded to your e-mail as an attachment.

While the advantages of moving to the cloud are many, there are some downsides.  You’re at the mercy of the vendor to keep the service up and running.  And while your internal network and your own computer are also vulnerable to hackers, so are cloud services, although they’re probably better at protecting data than you are. 

Still, for most small business owners, the savings in time and cost that cloud services offer will be worth it.  If you’re thinking about buying a new piece of software, hardware or a telecom service like phone or fax, do a search to see if there is a “cloud” or Internet version that might do the trick. 

Erik Larson is founder and president of NextAdvisor.com, a San Francisco-based consumer and small business information Web site that provides reviews and comparisons of cloud services.