The development of information and communication technologies has led to the acceleration of the economy and new business opportunities for business entities. Guided by the basic principles of business, the management of the business entity has the task of optimizing business processes in order to become and remain competitive. Business process optimization is achieved by reducing costs and increasing quality. One way to optimize is to use cloud computing for digital data processing. By definition, cloud computing reduces start-up costs. In addition to reducing costs, the use of cloud computing also provides new business opportunities. In order to assist management in making rational decisions regarding the transition to the use of cloud computing, the research defined a conceptual model of cloud computing for small and medium-sized businesses that represents the know-how for rational and efficient outsourcing of digital data processing using cloud computing. In addition to the above model, the result of the research is a cross-section of business entities in the Republic of Croatia, especially from the point of view of structure, review of business processes, with special reference to information and communication processes and their externalization, definition and consideration of cloud computing small and medium-sized businesses, consideration of the views of management, especially in terms of the use of information and communication technology and cloud computing. Special attention is dedicated to the criteria and decision-making model regarding the cost-effectiveness of the transition of business entities to cloud computing, which should help management in making rational decisions regarding the implementation of cloud computing in the business of small and medium-sized businesses. The primary surveys were conducted by a questionnaire sent electronically to business entities in the Republic of Croatia. The data collected by the questionnaire were statistically processed and logically interpreted. Secondary research was conducted by studying printed and digital predominantly scientific data sources. In addition to these scientific methods, other scientific methods were used in the research, such as abstraction methods, classification methods, historical methods, induction methods, deduction methods, synthesis and analysis methods, comparison methods, descriptive, symbolic, graphical and algorithmic modeling methods and etc. The results of the research, in addition to theoretical, have a pragmatic value because they represent the basis for rational decision-making to management in pragmatic business conditions, and related to the implementation of cloud computing in small and medium-sized businesses.