What is Cloud? An Overview for Business Owners
Today, it is not possible to pick up a trade publication without some form of a feature on cloud-based IT services being discussed. These cloud services promise both economic efficiency and improved business agility through the transformation of how IT services can now be delivered. Cloud services are set to be the most significant evolution of the IT industry since the introduction of the personal computer but what is cloud?
In large enterprises, IT specialists are working on plans to transition IT infrastructure to Cloud Providers, and are fully versed in the benefits and cost savings that can be gained. But what about small and medium-business (SMB)? Should business owners be equally interested in the cloud technology shift?
An unequivocal YES! For several reasons:
- First, cloud platforms can help increase the value a business gets from its IT spend, including a rapid rollout of new products, services & capabilities.
- Secondly, cloud platforms and services can significantly de-risk the business in areas such as data protection, restore and recovery while providing tremendous peace of mind to the business owner regarding business continuity in the event of a minor or major disaster.
- Thirdly, cloud platforms and service providers can introduce other business risks that the business owner needs to understand, assess and then decide on the approach to be taken.
This three-part series of blog posts will discuss the benefits and the risks of cloud platforms and hosted infrastructure services from a business perspective. Just as email was a radical evolution 20 years ago, moving all or part of your businesses IT systems to the cloud is ultimately inevitable, so you should be planning for this move now. However, for SMB business owners to make informed decisions about the correct way forward to the cloud they need to understand both the benefits gained, together with the risks.
To begin this series of posts lets first understand what the cloud is.
Search the web, and there is no shortage of definitions. In laymen’s terms – cloud computing is the delivery of computing and storage resources as a service to a group of end users over a network (typically the internet). The name originated from the use of a cloud-shaped symbol as an illustration for the complex, offsite infrastructure it contains in system diagrams. Cloud computing relies on the sharing of the resources above to achieve optimization and economies of scale similar to a utility (like the electricity grid).
At its core, cloud computing provides on-demand provisioning and allows for the delivery of elastic IT services, that can simply be ramped up and ramped down dependent upon demand. Cloud computing employs a pay-for-use billing model, ensuring that users pay only for what they provision and consume.
End users access cloud-based applications through a web browser or a light-weight desktop or mobile application while the business software and user’s data are stored on servers at a remote, cloud location. Cloud computing allows businesses to get their applications up and running faster, with improved manageability with less maintenance and therefore lower costs. Professionally run and administered cloud services also offer the advantage of providing real-time back-up and fully support business continuity in the event of a disaster.
Businesses do not incur the heavy capital expenditures associated with building and maintaining their in-house IT services. The need for on-premise IT infrastructure such as desktop software, servers, PC upgrades, storage & UPS is removed as these requirements move to the cloud. End user billing is linked to the provisioning process, allowing businesses to scale their requirements up and down based on short-term needs.
This pay for use billing model yields typical savings of 20-40%, compared to traditional infrastructure services turning your IT infrastructure from a capital expense to a very predictable operating expense.
Return on Investment becomes a simple calculation. The removal of the need for ongoing capital expenditure, reduced, on-premise, IT support, energy savings, backup, and data storage savings can be compared to a simple, monthly charge. These costs are both predictable and easy to budget for if you need to support more users as your business grows.
This blog series will focus on the steps, the benefits, the risks and the process of moving to a cloud infrastructure. In our next post, we begin the discussion of the business benefits of the cloud.