In recent years, cloud-based technologies have gone all the way from a novelty to an essential component of digital transformation. Nowadays, the majority of executives are already on board with the idea of relying on cloud computing in business operations. For those still in doubt, here is an overview of benefits offered by cloud-based solutions, along with some challenges to be on the lookout for.
The Rise of the Cloud
Cloud computing continues to win the sympathies of the enterprise world. According to the latest cloud computing study from IDG, 38% of organizations already rely on cloud computing, and more than half (59%) plan to move all or most of their operations to the cloud in 18 months. Lowering the bar to “at least one cloud implementation” yields an even larger number of 81% – a substantial increase from 2018’s 73%. By comparison, only 8% still maintain their IT infrastructure on-premises.
So what is fueling this trend? In broad strokes, the adoption of cloud technologies is a part of the larger movement of digital transformation. This concept, which also covers things like enterprise mobile app development, IoT, and big data analytics, takes advantage of digital capabilities to increase performance and deliver better service to customers. Traditional IT systems, which paved the groundwork for digital transformation, are no longer up for the task, whereas the cloud offers all of its benefits. In this light, the four main factors behind the popularity of the cloud are as follows:
- Cost savings: cloud computing is usually less expensive to implement and maintain than on-premises hardware.
- Scalability: Additional computing power can be drawn from the cloud on-demand and is far simpler than installing another bare metal server.
- Agility: Cloud infrastructure reduces the number of steps necessary for new app deployment.
- Future potential: Cloud platforms are usually at the forefront of innovation, so new and promising solutions will likely appear there first.
From this perspective, investing in cloud computing makes perfect sense for gaining a competitive advantage and preparing for the long-term strategic development.
The Case for Cloud-Based Digital Transformation
Incorporating a cloud-based platform into business operations starts from making a compelling case. This covers its immediate effect on operations, the added capacity for growth, and its role as a catalyst of innovation. Below is an overview of advantages that should cover the majority of enterprise use cases.
One of the most apparent advantages and the one that will appeal to every executive. Not only are remote resources more affordable than hardware installed on-premises, they also eliminate the expenses associated with storage and maintenance. Moreover, cloud-based services offer finer granularity of payment options as they work on a pay-per-use basis. This is particularly valuable for smaller businesses that can adjust their expenditure based on the demand.
Performance and Stability
Due to their distributed nature, cloud-based services are less prone to malfunction. Load balancing on the side of the service provider will ensure that the appropriate amount of resources is always available to any given client. For businesses, this means less downtime, more stable performance and, by extension, fewer lost customers.
It is not uncommon for digital-first businesses to outgrow their intended capacity. Historically, this was dealt with by deploying more servers to provide the necessary storage and bandwidth, which, in addition to being expensive, may not keep up with exponential growth common in the digital age. Cloud services address it in a more elegant manner by allocating resources on demand. What’s more, they can do it automatically, which not only minimizes the chances of unexpected overload but also keeps the costs down by only using what you need.
Loss of personal data remains one of the main reasons customers tend not to trust large companies, which also spills over into substantial financial losses. Cloud service providers deal with this issue by having multiple layers of protection and offering regular software updates to fix newly discovered vulnerabilities. Again, this reduces operational expenses and, more importantly, helps establish a good reputation with the audience and win customer trust in the long term.
Overall, the cloud-based infrastructure is more robust than legacy solutions. For large enterprises, which incur major losses from even the briefest delays in operation, this involves seamless recovery and uninterrupted operation. Small businesses, which rarely have sophisticated backup strategies, will benefit from guaranteed data safety and zero-loss operation.
The seamless nature of the cloud environment also opens up interesting opportunities for a productive interaction between individuals, groups, and departments. Fine-tuned access permissions will ensure that employees can access necessary information from any location and share it with eligible parties. In addition to strengthening corporate safety, it also promotes creativity and innovation by bridging the communication gap.
This is probably the least evident aspect of cloud computing that is often undeservedly left out of the conversation. Thanks to the economies of scale, remote servers will consume less energy and create a smaller carbon footprint compared to locally deployed hardware with the same output. This aspect is especially valuable for organizations that need to adhere to CSR policies.
The Long Road Ahead
Despite already being miles ahead of legacy IT solutions, cloud-based services can still be difficult to implement. Migration to the cloud is a multifaceted process that will require a coordinated effort from all involved stakeholders. Here are the main challenges businesses should be prepared for:
- Security: While as a technology the cloud is more secure than on-premises servers, it still has to comply with formal requirements in customer agreements, which will have to be discussed with the provider.
- Regulatory compliance: The remote location of cloud infrastructure may be a problem from the regulatory standpoint, so compliance has to be validated prior to launch.
- Relevant skills: No matter how simple and intuitive, the cloud still takes a certain level of proficiency for a successful migration, which should be acknowledged in change management.
Cloud computing is on a steady course to becoming the industry standard of digital transformation. Its growing popularity, as well as the staggering rate of adoption, also suggest that it will become even more versatile and accessible in the near term. In this light, it is a promising direction to explore in the pursuit of sustainable, responsible, and thriving businesses.