Cloud computing in business: A silver lining?

Cloud computing is a resource that businesses have rapidly adopted as a major step towards completing their digitalisation.

First launched in the late 1990s,¹ cloud services were a revolutionary development in technology and signified a shift from the conventional ways in which businesses managed and deployed IT resources. This shift has been further accelerated by the COVID-19 pandemic and the prevalence of working from home, with nearly all organisations (99%)² using at least one public or private cloud as of 2021. Despite all the benefits of the cloud, are there times when traditional on-site hosting is still the better fit?

Potential advantages of the cloud to business

Cloud computing is an on-demand delivery of computer services. It includes storage, software, databases and documents.³ The main advantages of cloud usage for businesses are:

• Cost-effectiveness and flexibility: As cloud computing provides services on-demand, businesses only pay for what they use. This allows businesses to better optimise their budgets and to remain competitive. Before the cloud became a practical alternative, businesses had to buy and maintain expensive IT management technology and infrastructure.
• Storage: Users can store and access files from anywhere using services such as Google Drive and Dropbox. Cloud infrastructure means that individuals can save storage space on their devices. Software can also be upgraded more quickly since software companies can offer their products over the Internet.
• Mobility and data recovery: Users can check their emails on any device and use software on any computer. Cloud computing also makes it possible for music, photos and other files to be backed up, meaning they can be quickly recovered in the event of hardware failure.
• Scalability: Resources such as storage, network bandwidth or processing power can be increased or decreased on demand, according to the computing requirements of the business.

Businesses are therefore moving away from in-house IT equipment in favour of renting cloud platforms, infrastructure and software. Indeed, cloud computing is rapidly moving towards mainstream adoption, even in the most conservative industries such as financial and legal services.

Talking points in cloud computing

Speed, convenience and innovation have motivated many businesses to move large parts of their computing to cloud platforms. However, there are still a number of challenges associated with the cloud that businesses need to manage:

• Cybersecurity: Although regulations require cloud computing services to reinforce their security and compliance measures, this is an enduring area of concern. If cloud services are interrupted, the knock on effects are likely to be significant, potentially to a range of businesses using those services.To enhance the security of any sensitive data stored on the cloud, encryption can be effective; however, if the encryption key is lost, the information is in danger of being wiped out.
• Geographical reach: Servers supported by cloud computing providers are susceptible to internal bugs, power cuts and natural disasters. The geographical scope of cloud computing is a double-edged sword. A power outage in London could incapacitate users in Paris, and a firm based in New York could lose data if its California-based provider crashes for any reason. With large numbers of employees and individuals accessing and modifying information via a single portal, mistakes can transmit across a whole system or organisation.
• Legal risks: Businesses that process sensitive consumer data, such as medical or financial information, must remain cognisant of the legal and regulatory implications of using cloud computing services.To this end, businesses and cloud service providers should regularly evaluate their information security, data protection and business continuity management policies and frameworks.⁴

Evaluation

With the widespread adoption of cloud computing, businesses are benefiting from more cost-effective, efficient and scalable IT resources. Service providers can deploy updates and fixes to software more quickly and users receive the latest system improvements as soon as they are released. Individuals have on demand access to files and software from any location. Cloud infrastructures also encourage environmental responsibility by running virtual services, as opposed to physical products and hardware.

On the other hand, businesses risk losing control over their data and the level of service they receive. With cloud computing, the power to decide who accesses the data, as well as the features being used, is now in the hands of the cloud service provider. With customers putting pressure on cloud providers to reduce their costs and fixed charges, businesses have to work hard to optimise their cloud spending. Additionally, with increased accessibility and reach, bug fixes, system failures or even routine updates can render an entire system unresponsive. As such, cloud computing risks and mitigation can be difficult to evaluate internally.

Will the cloud burst?

Cloud computing comes with both advantages and risks. Businesses should remain mindful of these risks and how they may affect their productivity and wider reputation. However, in today’s competitive environment, when businesses are looking for methods to increase their productivity, efficiency and overall performance, cloud computing certainly presents an opportunity.