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Or you could just source and store on the cloud. There. A 2 thousand word solution verses a 10 word solution.

I was thinking the same thing. I'm setting up a small business tech system right now, and I'm not going to have anything locally, no files, no applications, nothing except the operating system (right now, Google Chrome). All of the problems cited by the OP are thereby eliminated. Everything's backed up always, hardware failures will always result in zero downtime because there will always be other devices around to log-in from, no software to purchase, no compatibility issues, no malware, viruses, or manual updates. All files are available anywhere out in the field, from all kinds of device, including smartphones and tablets. Yes, it's not "confidential", but the only way to entirely eliminate the possibility of someone seeing your files is to stay off the internet completely (at least on the computer in question) and a computer not connected to the internet in 2012 makes about as much sense to me as a cell phone without a voice and data plan.