The cloud is transforming the way organisations do business

 

Most businesses have traditionally stored their data and software on centralised servers and then accessed it via local or wide area networks using devices such as desktops and laptops. This can be extremely expensive to setup and maintain and is often inflexible when it comes to harnessing the information.

A growing number of organisations are ditching the old model in favour of cloud computing, which relies on hosted services delivered over the Internet. The data and resources are stored on the cloud provider’s servers and available on demand as and when the company needs them. This is a more scalable approach that has the potential to totally transform the way it does business.

 

Cloud computing has many advantages:

• It allows companies to respond quicker to changing levels of demand as the capacity is the responsibility of the cloud vendor.
• Simple web style interfaces make the applications easy for people to use without the need for lots of training.
• New applications can be quicker to develop and it is easier to ensure the software being used is always up-to-date.
• It can be a lot cheaper with a lower initial investment and less expensive annual running costs.

 

Growth area

The IT research company, Gartner, has recently identified the top 10 strategic technology trends for businesses in 2014. Three of these relate to cloud technology, with the most striking described as ‘The era of personal cloud’. This predicts that the primary focus will shift away from the device that is being used to access the data to the content that is being stored on the cloud and how the process is managed.

 

If they are right, there is likely to be a large increase in cloud traffic. A study by Cisco estimates that this will grow fourfold between 2012 and 2017. By that point it will represent more than two-thirds of the total traffic handled by global data centres. The onus will be on the Telecoms industry to deliver the infrastructure that can keep up with the demand.

 

The attraction of the cloud for small businesses and start-ups is the lower initial capital expenditure and the fact that they don’t need to hire a large team of IT experts. They can be up and running quickly and only have to pay for the services they consume.

 

Cost-benefit analysis

A more established organisation could find that the costs of switching to the cloud are easier to quantify than the benefits. In some cases they may have to upgrade their networks and infrastructure before seeing any return. The payback is the extra flexibility, which makes it easier to react to market opportunities and to communicate and collaborate.

 

One company that is using the technology to good effect is StatPro. Their cloud based investment management software can be easily delivered across their client organisations. This enables the portfolio analysis data to be widely scrutinised, analysed and acted on. Timely and interactive portfolio analysis can be quickly distributed and if required can be shared with the institutions or individuals whose money is being invested.

 

This would be much more difficult for an organisation that uses data and software that has to be installed on all the various desktops and laptops. Normally it is only static files that could be shared unless the programme is setup on all the recipient’s devices. This would require additional software licenses and would probably not be practicable for users outside of the business.

 

Security concerns

It is clear that there are major benefits to using the cloud, but questions have been raised about security. Organisations are responsible for making sure that their data is safe and where they use a third-party to store and deliver it they need to satisfy themselves about their procedures. There is an interesting discussion about this whole area available from The Guardian.

 

A recent survey of 100,000 IT professionals found that two-thirds of small or mid-sized companies thought that the risk of cloud computing outweighs the benefits. The four main security concerns are: unavailability through malicious overuse, loss of data due to deliberate destruction, theft of data, and disclosure to unauthorised staff.

 

Despite the potential risks there are numerous governments around the world that have latched on to the benefits and are using the cloud to deliver essential services at a lower cost. The US army, air force, navy and Department of Justice were all early adopters and have set the trend for other public bodies to follow suit.

 

The use of cloud computing is gaining momentum as more organisations recognise the benefits. For some it is the cost savings that are the main driver, but those businesses that really embrace the new technology can completely transform the way they operate and how they interact with their clients. Just like the Internet, the cloud has the potential to completely change everything.

 

By Nick Sudbury