File storage systems of old required the use of bulky filing cabinets (not to mention massive deforestation). These days you could fit a warehouse worth of documents into a paperback-book-sized external hard drive.

In fact, the digital era and online technologies have vastly expanded the ways in which businesses can store data, providing ample opportunity for companies to cut their carbon footprint and save a ton of physical space (in their office or elsewhere) for hard copies.

While some businesses may still save physical backup files, the truth is that electronic file storage is simply more expedient since data can be accessed at any time with little more than a few keystrokes. And the main thing you’ll want to consider is whether you should use cloud storage to host your files or if it’s better to keep them in house (so to speak).

There are pros and cons to both options, although to a large extent they depend on the amount and size of data you plan to store and the sensitivity level of that information. If you produce huge amounts of data (like HD video files, for example), you might lean towards cloud storage, which is virtually unlimited. The reasoning is simple; the more physical storage you have to arrange for in your office, the more it’s going to cost you.

First you must have space for your servers. This room (or warehouse, as the case may be) needs to be temperature controlled to ensure that your machinery doesn’t overheat. You will also have to hire IT staffers to monitor, maintain, and fix any issues with your system and you will be responsible for having a backup if your servers go down.

The costs quickly add up. Although you will pay for cloud storage, as well, you’ll avoid the many potential pitfalls and additional expenses that could come with storing massive amounts of data at your business facilities.

Of course, if your storage needs are fairly simple and limited, you might be able to get by with nothing more than external hard drives attached to employee computers. This is a viable and cost-effective strategy for many small businesses, although it will probably require you to implement software that allows for sharing files. But you also need to think about security.

Many companies prefer on-site data storage because they have full control over security. They control the firewall, the passwords, and any protective software in use (antivirus, anti-spyware, encryption, etc.).

This is not to say that cloud storage is totally devoid of safety features to protect the data it houses. In fact, it is often touted as being safer than other types of electronic storage because information is spread amongst a multitude of servers, making it nearly impossible for hackers to download complete files.

But at some point a business will have to allow the cloud storage facility to handle security concerns, and some companies simply don’t feel confident relying on others to safeguard their sensitive data. In truth, you will have to weigh your needs against the potential benefits and drawbacks of each type of digital storage in order to make the decision that best suits your company. But with two great options you should be able to find the data storage solution that’s right for you.