This is the age of Information Technology and the access to and availability of information is crucial Small Scale Enterprises (SMEs) are a very vibrant segment of the Indian economy making substantial contribution to the Indian economy. SMEs need to obtain and store information at a competitive cost. Cloud computing provides an easy solution. Cloud computing refers to a set of services that provide the necessary infrastructure for data storage on a third party server. This paper after covering extensively the definition and types of clouds goes to look at the benefits and limitations of cloud computing for SMEs. Given the benefits it outlines the opportunities and challenges for SMEs.