Cloud computing is the delivery of computing services, including servers, storage, databases, networking, software, analytics, and intelligence over the Internet (“the cloud”) to offer faster innovation, flexible resources, and economies of scale.
How does cloud computing work?
Rather than owning their own computing infrastructure or data centres, companies can rent access to anything from applications to storage from a cloud service provider.
One benefit of using cloud-computing services is that firms can avoid the upfront cost and complexity of owning and maintaining their own IT infrastructure, and instead simply pay for what they use, when they use it.
In turn, providers of cloud-computing services can benefit from significant economies of scale by delivering the same services to a wide range of customers.
What are the benefits of cloud computing?
The exact benefits will vary according to the type of cloud service being used but, fundamentally, using cloud services means companies not having to buy or maintain their own computing infrastructure.
No more buying servers, updating applications or operating systems, or decommissioning and disposing of hardware or software when it is out of date, as it is all taken care of by the supplier. For commodity applications, such as email, it can make sense to switch to a cloud provider, rather than rely on in-house skills.
A company that specializes in running and securing these services is likely to have better skills and more experienced staff than a small business could afford to hire, so cloud services may be able to deliver a more secure and efficient service to end users.
Using cloud services means companies can move faster on projects and test out concepts without lengthy procurement and big upfront costs, because firms only pay for the resources they consume. This concept of business agility is often mentioned by cloud advocates as a key benefit. The ability to spin up new services without the time and effort associated with traditional IT procurement should mean that it is easier to get going with new applications faster. And if a new application turns out to be wildly popular, the elastic nature of the cloud means it is easier to scale it up fast.
For a company with an application that has big peaks in usage, such as one that is only used at a particular time of the week or year, it might make financial sense to have it hosted in the cloud, rather than have dedicated hardware and software laying idle for much of the time. Moving to a cloud-hosted application for services like email or CRM could remove a burden on internal IT staff, and if such applications don’t generate much competitive advantage, there will be little other impact. Moving to a services model also moves spending from capital expenditure (capex) to operational expenditure (opex), which may be useful for some companies.
Some advantages and disadvantages of cloud computing
Cloud computing is not necessarily cheaper than other forms of computing, just as renting is not always cheaper than buying in the long term. If an application has a regular and predictable requirement for computing services it may be more economical to provide that service in-house.
Some companies may be reluctant to host sensitive data in a service that is also used by rivals. Moving to cloud computing may also mean you are using the same applications as a rival, which might make it hard to create any competitive advantage if that application is core to your business.
While it may be easy to start using a new cloud application, migrating existing data or apps to the cloud might be much more complicated and expensive. And it seems there is now something of a shortage in cloud skills, with staff with DevOps and multi-cloud monitoring and management knowledge in particularly short supply.
In one report, a significant proportion of experienced cloud users said they thought upfront migration costs ultimately outweigh the long-term savings created by cloud computing application. And of course, you can only access your applications if you have an internet connection.
