Despite all the recent talk about putting your business ‘on the cloud,’ the concept is really nothing new. Chances are you’re already using the cloud in your daily life. Ever use Pandora to stream a custom radio playlist? Yup, that’s the cloud. Ever send or store a file using MediaFire, YouSendIt, or Dropbox? Check, cloud again.

The entire Internet itself could technically be thought of as “the cloud.” You’re reading the Up and Running Blog right now, but are its contents stored on your computer? Of course not — you’re accessing the cloud as we speak.

So what do we mean when we talk about moving our business over to the cloud?

In short, small businesses and large corporations alike have historically had to manage their own servers to store all of their company’s information and archives. The drawbacks to maintaining this sort of hardware are numerous, from storing backups to having a contingency plan to keep the business running during a power failure.

Today’s cloud providers take that burden off of the business, shifting the heavy-lifting over to massive remote servers with multiple backups. In short, every computer at your business gets in sync, the chances of a crash are exponentially decreased, and you’re freed up to work from your latest round-the-world adventure. Sound good?

In a nutshell, here are five basic reasons that cloud utilization makes sense for any business:

1. Increased Productivity

Tell me if this scenario sounds familiar: Employee One writes a draft document and forwards it to Employees Two, Three, and Four for feedback, each of whom reply with their own mark-ups to the document. Employee One struggles to incorporate conflicting feedback and must email the group three more times as he/she makes edits over the course of an entire work week.

With the cloud, there’s a better way. Perhaps your office already uses a service like Google Drive (formerly Google Docs). Similarly, with an internal cloud provider, each pertinent employee can access a working document, making changes in real time. The send-and-wait email process can be eliminated almost completely, making it possible to complete tasks that were once drawn-out affairs in just a few hours.

2. Reduced Power Bills

Even small companies can see big savings from removing their own servers from the office. When the U.S. General Services Administration moved to the cloud for their 17,000 users, they cut their energy use by 90 percent. Why pay to run a server 24 hours a day? That’s not to mention the green aspect: cloud providers typically use state-of-the-art cooling systems that are highly efficient, meaning you’ll reduce your company’s carbon footprint in the process.

3. No Upfront Investment

In the past, a company had to estimate how much server space they needed and purchase hardware accordingly, leaving room to grow. Most cloud providers, on the other hand, offer pay-as-you-go plans that allow your business to grow at its own speed, while only paying for the server space that you’re actually using. That means no upfront investment in costly hardware that you may not even fully utilize.

4. Automation Saves Time

How many tasks do you complete at work each day that an assistant or even a computer could do for you? By storing information in a central location, the cloud opens up options for automation of regular tasks, from invoicing to payroll. The less time that you have to spend crunching numbers and carrying out tedious tasks, the more time you have to be creative and grow your company.

5. Liberation From the Office

Sure, we’ve been able to email from anywhere in the world for quite some time, but since when could we work on a shared document in real time with an employee on another continent? Cloud technology tears down the office walls, freeing us to work from anywhere in the world. It may be hard to open your computer and dive into a spreadsheet while you’re sitting by the ocean in Aruba, but there’s no better feeling than completing the project and diving immediately from the spreadsheet into the Caribbean. And why not? When it comes to telecommuting with the cloud, the sky’s the limit.

AvatarSharon Florentine

Sharon Florentine primarily blogs about business and technology, and is currently an editor at Rackspace Hosting.