There are some very important business and operational reasons why companies must adopt the cloud or risk being left in the dust. This HP whitepaper outlines these reasons and shows why those that have adopted the cloud will continue to thrive.
Opex over Capex
In business, capital expenditure can be a drain on operational performance. Just like buying a new car that is then worth half its original cost after about a year's driving, the same can be said for servers and data storage equipment, as well as on-premise software.
Constant outlays on hardware and software have a detrimental effect on cashflow and a drastic effect on the company's bottom line. This is where cloud computing comes to the rescue, by allowing customers to use the systems provided at a much cheaper cost using the Opex model. Those companies doing everything themselves in-house, with their own hardware and software, are at a cost disadvantage.
A lack of business flexibility
With cloud computing, companies have more flexibility to ratchet up computational processing power in response to the needs of the business. Instead of buying loads of server and storage capacity that may or may not be used to cover the needs of the business, cloud users can react fast to business needs and buy more processing power for applications and services when they need it. Such a model also means they are less likely to get caught short for processing capacity, when compared to those companies who "guesstimate" what capacity they may or not need, by solely relying on their own hardware and software.
Testing new services
Using a platform-as-a-service model via the cloud, organisations can buy in hardware and software capacity for a fixed short-term period in order to test out new applications and services. If they decide to commercialise such services, they can rent that capacity for a longer period. Those not considering such a model may struggle to develop new ideas using their existing IT architectures, which will usually give access and priority to those company services that "keep the lights on".
Cost-effective business continuity
The cloud allows companies to back up their data and archive it at a cheaper cost than setting up and owning their own additional data replication site. Organisations using the cloud for business continuity can use a service provider's data centre to back up their information, and have easy access to it if their own image of that data suffers an outage or becomes corrupted.
Companies not considering such a solution will be left with greater business continuity costs and may effectively still be running backup systems that don't avoid single points of failure, if those systems rely on data backed up on the same site or nearby, which is common.
More efficient mobile working
Mobile devices, such as smartphones and tablets, are increasingly being used to try and access business applications that are often "top heavy", such as ERP, CRM and large databases. While the processing power of such gadgets is becoming more impressive, quite often that power is not fast enough to interrogate the really big applications.
It is much easier to send simple instructions from the gadget to cloud-hosted business applications, whereby the cloud service provider's powerful servers will be used to interrogate the application for answers, and then send them back to the mobile device in a more streamlined way. Mobile devices relying on their own power to connect to and interrogate often slower on-premise systems will leave their users regularly frustrated.
Perhaps a contentious issue for some, considering security is often cited as a major barrier to adopting the cloud, the fact remains that if you can secure the servers and other devices that your data resides on, then it doesn't really matter who owns and operates those servers, wherever they might be located.
Updating security software, installing the right firmware and upgrading physical security at data centres is costly, time-consuming and quite frankly a complete pain. So why not get someone else to do it in a more reliable fashion? Cloud service providers know that security is a business battle ground in the cloud market and many more of them are stepping up to the plate. The old adage is that you get what you pay for, but getting top class cloud security may not be as expensive as you think, and may in fact work out cheaper than doing it yourself in a faltering manner.
Data management and a single version of the truth
It is far easier to share business data over the cloud with employees, partners and suppliers. If they have one place to go to in the cloud to access and/or change a document or file, it is easier to make sure the version of that data is accurate and up to date.
Sharing cloud data privileges with the people that matter is more efficient than spending time distributing documents in different directions, and leaving people confused as to which version is the one they should be looking at to get the full and accurate picture. Not storing and managing operational data in the cloud could leave organisations struggling to keep their business, and open to operational problems.
Big data and data analytics
We have already mentioned above on the mobile front that it is easier to interrogate data in the cloud when completing business processes. It is also easier in the cloud to complete data analytics tasks using the increasing amount of big data being generated.
The main cloud providers have almost limitless data processing capacity and, when coupled with the latest data analysis tools, companies can use those providers to interrogate their business data to try and explore new customers and products - far easier and often much cheaper in the cloud.
Those organisations that don't take advantage of such cloud systems will potentially be left wanting in their business research, by either investing in expensive data analytics systems that quickly go out of date, or not having the power really necessary to squeeze every last piece of business benefit out of their valuable data.