Cloud Computing and the Future of Business

According to Wikipedia, Cloud computing, or something being in the cloud, is a colloquial expression used to describe a variety of different types of computing concepts that involve a large number of computers connected through a real-time communication network such as the Internet. Cloud computing has become a buzzword across all business spheres since it was coined in the early 2000s. The major benefits of cloud computing to any business owner or stakeholder are the ability to be agile and scalable. Computing resources can be spun or killed, scaled horizontally or vertically, depending on business needs in real time, bringing cost savings and the ability to meet up with a huge unanticipated influx of demand.

The major benefits of cloud computing revolve around the following dimensions:

  • Cost: SMBs and Enterprises alike are now able to test out ideas and roll out applications that impact their businesses significantly without a major upfront investment. The biggest impact is being seen with SMBs, as they can now implement software or innovate with computing infrastructure without a huge barrier to entry. As a result, they can experiment and effectively compete with large enterprises in the same markets because cloud computing gives them scalability on a budget; a luxury once only accessible to large enterprises.
  • Agility: The speed at which software and infrastructure can be accessed on the cloud is faster than ever before. As a result, ideas can be implemented and tested very fast for a short period of time without the need to build out a data center or provision servers. Amazon’s cloud service; EC2 launched in November 2010. EC2 gives anybody the ability to spin up 1,000 machines (if needed) for just 1 hour to fulfill a need, or more if needed. And shut them down once the need has been fulfilled. As a result, businesses are able to take advantage of more computing power than they have ever been able to. Applications like analyzing big data to make more informed business decisions, artificial intelligence and more are beginning to emerge from these possibilities. Business are able to succeed or fail faster than they ever without loosing much.
  • Mobility: Due to the existence of the resources on the cloud, business stakeholders can access software or infrastructure needed to run their businesses from anywhere they can get access to the internet. Gone are the days where business software would be only useful on the server or within the network they are installed.
  • Continuous Improvement: Businesses can trust cloud service providers to continue improving their infrastructure as technology in the marketplace changes and improves. As a result, companies do not have to worry about hiring a sophisticated IT department to ensure that compliance is achieved, updates are being applied and infrastructure is being maintained as appropriate. The cloud effectively brings savings and efficiencies they achieve from economies of scale due to the fact that they offer software or infrastructure en masse, to the businesses that patronize them. As a result of this, businesses that migrate their systems and computing infrastructure to the cloud benefit immensely from not having to worry about improving their systems or infrastructure.

The biggest risk with cloud computing that has been expressed in multiple circles is security. There is the inherent fear that outsourcing infrastructure or business systems to cloud providers could expose data, information and systems critical to competitive advantage or privacy, to the public. Various businesses have solved this problem by implementing private cloud infrastructure, or hybrid cloud setups where extremely private information remains within their on site infrastructure and computing is moved out to cloud infrastructure. In essence, the benefits that come with cloud computing are immense and will deliver value regardless of which part is moved to the cloud.

The most popular applications of cloud computing are for hosting-

  • Software (Software as a Service): Where the software is hosted and elastic. Servers, code and infrastructure are totally abstracted from the interface that is presented to the consumer.
  • Infrastructure (Infrastructure as a Service): Where the physical hardware is abstracted from the consumer, but they have control over virtual hardware resources. CPU cores, RAM, Storage space are typically elastic and can be increased or reduced on the fly.
  • Platform (Platform as a Service): Where the hardware resources are totally abstracted from the consumer but different components (e.g. Database Server, File Server, Web Server, Caching Server, Mail Server etc.) can be mashed up to create a platform of sorts, custom tailored to run applications as defined by the consumer.

What does this mean now and in the future?

  • Low barriers to entry for software businesses.
  • Ability for Small and Medium Businesses to implement infrastructure as if they were Large.
  • Ability for ideas and concepts to be tested and experimented with rapidly.
  • Ability for startups to radically disrupt large enterprises and give them a run for the markets they once dominated.
  • Ability for businesses to deploy computing resources as needed on the fly as needed, leading to a reduction in waste and just in time availability of technical infrastructure.

Case in Point- 10 years ago, a movie production company releasing trailers of a new movie they were working on would have needed to buy a dedicated server, own or lease their data center, and bought more and more servers as interest for their movies got traction. Due to the fact that movie production companies are unsure about the potential interest their movies will generate, it is wasteful for them to dedicate resources to serving trailers. Today, the cloud enables them to throw up their landing pages on low cost machines that can scale up and down as their needs increase or decrease. If the movie does not generate the anticipated interest, they don’t incur the costs associated with the resources they did not use. Such are the benefits that come with cloud computing.


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