The strategic importance of Cloud Computing
Cloud Computing / Services is the on-demand delivery of technology services – computing, applications, storage, management – which is usually delivered over the internet. It enables the consumption of shared and virtual IT resources, based on user need. It provides real-time access to on-demand computing services, the volume of which, depending on need, can be turned up or down.
There is a plethora of services that come under the broad title of Cloud Services. There are consumer services such as Yahoo Mail / Gmail or Google Drive, or services that enable enterprises to host data and run business applications in the Cloud. Then there are other examples such as Netflix or Webex or MS 365 that have become quite ubiquitous now.
There are several drivers behind the global push towards Cloud Computing, some generic, some industry-specific.
Let us take a closer look at some drivers, in no specific order of priority:
a) Just In Time infrastructure
A move towards digitalization had been building up over time across industry verticals, and the pandemic has only accelerated it. This has translated into higher and up-front investments in infrastructure. A shift to the Cloud means that organizations can invest only when really needed, and don’t have to lock in finances in advance. It also reduces the need for extensive prior planning which is a pre-requisite with on-premises architectures. The Cloud thus enables a “Just in Time” approach to Digital Transformation and infrastructure planning & deployment.
b) Data explosion
Generation of information and data in a variety of formats, across industries, is exploding all over the world. As a result, at the ground level, the need for adequate computing power, applications, management tools, analytics, and storage space has grown proportionally. Traditional on-premises infrastructure is not able to meet these needs in a cost-effective way. Plus, there is the need for extensive planning and a high deployment time. In contrast, cloud architectures meet all these requirements in a timely, scalable, and cost-effective manner.
c) Increased need for computing capacity
An increased need for computing power due to new tech, new applications, rising workloads, calls for increased computing power. But to make it cost-effective, it needs to be scalable for every organization, as business needs fluctuate. The Cloud, due to its very purpose and architecture, meets this need far better than on-prem set-ups can.
d) Emphasis on Digital Transformation
Digital Transformation or Digitalization is today a key business imperative, and Cloud-led strategies are a prime driver of this transformation from on-premises set-ups. Over the past few years, it has increasingly been proven across business verticals and segments that Cloud Services can do the job admirably. Especially for startups and SMEs, Cloud Computing has emerged as a strategic tool to address people and financial limitations.
e) Increasing need for business agility and flexibility
Business agility is the ability of an organization to adapt and respond to the changing market conditions, customer expectations and emerging opportunities, with innovative strategies. In today’s times, such strategies are digitally enabled. A prime need of a successful digital strategy is the ability of the numerous business functions within an organization to work together cohesively and coherently, to rapidly churn out solutions that meet the desired objective. And the Cloud is ideally suited to deliver such solutions – it is on-demand, scalable, cost-effective and makes new-tech applications technologically and financially feasible and viable for organizations, across segments – small, mi or large.
f) Enabling mobility, boosting collaboration
The ongoing pandemic has given rise to a need for remote working, in which collaboration ability is an inherent expectation. Cloud computing is enabling employees to work from anywhere, at any time, and via any device, individually and in teams.
g) Environmental sustainability
At almost the same level of priority as cost or productivity, environmental sustainability – need to reduce greenhouse gas emissions or lower the carbon footprint of overall business operations – now figures as an important business need. Since Cloud Computing is a shared service and architected to be scalable and on-demand, it serves these environmental needs very well.
h) IT skills – retention and attrition
The main constraint faced by IT leaders today is building and retaining a balanced talent pool. Given the ongoing resource crunch, identifying and onboarding staff with the relevant skill sets is tough, time-consuming and costly.
The business advantages of Cloud Computing
No technology decisions happen without clear, demonstrated business benefits. It is the same with Cloud Computing. So, let us look at what advantages the Cloud offers us.
a) Higher cost savings
The Cloud delivers significant cost-savings over on-premises infrastructure. It enables a shift in IT spending from CapEx to OpEx, so business leaders are now more open to new technology investments. So, instead of owning their technology infrastructure, companies now rent it, which has accounting advantages. The Cloud reduces the need to over-provision IT resources in advance or spend considerable time on infrastructure planning, which is again a cost saver. Organizations can now optimize investments in people, infrastructure, maintenance, and real estate. And the flexibility to pay only for those resources that the company actually consumes, is a major point in favor of the Cloud. A pay-as-you-go model is ideal for startups and SME’s as it helps align expenses in line with business growth. Furthermore, a major cost saver is the access to latest hardware and software applications without having to maintain, upgrade, and migrate resources. Writing off investments is not a necessity any longer. Also, not having to maintain, retain and train IT staff is a big cost reduction.
b) Enhanced business agility
While traditional on-premises infrastructure can take very long to deploy, the Cloud offers near-instant provisioning of infrastructural resources such as servers, storage & applications, which saves approximately 50% in start-up time. This increase in agility lowers the cost of innovation and enables faster time-to-market or better responsiveness towards the market.
c) Improved service quality
The Cloud has been designed to support heavy and demanding workloads. A migration to the Cloud offers significant improvements in performance, reliability, and security over on-premises infrastructure. And instant scalability ensures that the expected performance levels can be maintained even with growing demand, in almost real-time.
d) Opening up of new possibilities
The Cloud enables new technology applications that would be extremely costly to deliver using on-premises infrastructure, such as Big Data and Analytics, or IoT, AI, Machine Learning, etc. This cost-effective availability of cutting-edge technology drives innovation and yields competitive advantage. Indeed, the true digital transformation that organizations are looking for, is driven by such possibilities.
e) Security and compliance
These are major considerations for any organization today. And regulatory compliance is needed by some industry verticals such as healthcare, finance and government, and none of the other drivers and benefits matter till the required compliances are met. Security has been designed into Cloud architectures – it has built-in security features, specialized tools, and automatic security updates. Also, some Cloud offerings seamlessly meet compliance requirements making adoption that much simpler.
f) Automated Backup and Recovery
Theoretically, any technology could fail. With that in mind, necessary precautions are always planned. It is the same with a Cloud set up. Only that, back-up and recovery capabilities are built into the architecture, and the user organization does not have to invest time or additional resources in planning for this.
g) Simplified Management and Monitoring
Depending on the provider, management, and monitoring of on-premises datacenters as well as Cloud infrastructure could be performed via the same tool, through a unified view, which means easier management for the I&O staff.
The impact of Cloud Computing
The Cloud has irreversibly altered the way IT as a function, and business itself, work together. Previously, IT decisions were largely the domain of the IT function, and business as a whole was only a consumer of technology services. These are now partners in innovation and strategy, which has intricately linked them together, demanding that they work in collaboration towards a common objective. The delivery of new services has been speeded up. Business services can go from thought to reality rapidly. Cloud deployments are now expected to outnumber on-premises deployments in the next few years.
Is the Cloud for you
Is the Cloud for you, are you ready for the Cloud…these are questions that every organization, that has not yet made the shift to the Cloud or have started off in a small way but perhaps not seen benefit, would be faced with.
Cloud suitability will vary from industry to industry and organization to organization. The more complex the business operations, the more scrutiny will be required while evaluating its fit, and more planning will be required during strategy execution. A business would need a clear understanding of the shift to the Cloud and of operational costs. Then would need to be compared those what it currently cost to run existing infrastructure, assuming it delivers the same level of performance.
A shift to the Cloud is not without its accompanying issues and challenges. Some degree of disruption to business is to be expected. The key would lie in thorough planning to ensure that it is controlled. There are various technical points that need to be considered – which applications and processes will need to be migrated and in what order of priority? Will the entire set-up be in the Cloud, or there would be some element of on-prem as well? Should applications only be migrated as-is, or upgraded as well while shifting? What training do staff members need to be provided in order to function in the new environment?
These and many other points must be evaluated. Engaging the right partner to guide you through this process is equally key to the success of your Cloud endeavor.