The proliferation of cloud computing in the last decade has seen one of the biggest changes to the IT landscape in recent history. An industry with revenues now in excess of $100 billion per year and set to rise to over $200 billion by 2020, the widespread adoption of cloud technologies is producing a growth rate more than 7 times that of the overall IT market. As investment in onsite IT diminishes and businesses in every sector move to cloud-based solutions, it raises the question of where did this phenomenon start, what does it do and why should you use it?
The formation of the Cloud
The concept of the ‘Cloud’ first appeared in the late-1970s when network engineers used it in diagrams. Drawn to represent the fuzzy space in which communication activities happened, it provided a means of describing a technical entity without a physical manifestation. This made sense of a developing world and was widely adopted in internet and network environments. However, it wasn’t until 1996 that official “cloud computing” first made an appearance, when it was mentioned in a Compaq internal document.
As the Cloud grows and expands
Cloud computing has come a long way since those very first mentions – from a diagram and buzzword to something that has transformed the way business works. Recent research shows that 60% of industrial customers now prefer to operate in the cloud.
Understanding the Cloud
Despite the early attempts to understand the cloud, many still struggle to fully comprehend what it is and how it works. Simply put, cloud computing is the delivery of computing services — servers, storage, databases, networking, software, analytics, intelligence and more — over the Internet (“the cloud”). As a general rule, businesses work within the cloud through one of three distinct service models: software as a service (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS).
SaaS: Software as a Service
The most widely accessible level is Software as a Service. This is the most common option for businesses, where a company provides you storage space, software and other tools that you can access from any compatible internet-connected device. With SaaS, there is no need to download and install applications on each individual computer and vendors manage all potential technical issues, such as security and backups. allowing your business to streamline your maintenance and support.
SSG Insight – Gartner announced that SaaS cloud is the largest segment of the cloud market and is expected to grow revenues 17.8% to $85.1bn in 2019.
SSG Insight – Proportion of customers that are hosted. 76% of SSG Insight’s new customers currently prefer a hosted solution.
PaaS: Platform as a Service
The next step up is Platform as a Service. PaaS providers give users the space and tools to build and test applications. It provides a framework for developers that they can build upon and use to create customised applications.
IaaS: Infrastructure as a Service
At the highest level is Infrastructure as a Service, which provides a massive amount of storage and servers through which users can build and utilise applications and software. IaaS allows businesses to purchase resources on-demand and as-needed instead of having to buy hardware outright.
Public and Private Cloud
Cloud services are also provided under different definitions depending on how the resources are deployed, namely public, private and hybrid cloud.
Public cloud solutions like Microsoft Azure or Amazon Web Services are most common and widely utilised. In this model, all of the hardware, software and supporting resources are owned by the provider and made available over the internet as shared resources.
Private cloud solutions operate in much the same way as public except that the infrastructure provided is always on a private network and the hardware provided is dedicated to just your business, it is not shared with any other cloud customer,
Hybrid cloud, as the name suggests, is a combination of the two and can offer a ‘best of both worlds’ solution, allowing businesses to leverage the key advantages of the two paradigms.
Why is cloud computing important for you?
Whether you’re a large commercial operation looking to reduce costs across multiple sites or a new startup trying to get to grips with a new market and gain a business advantage — cloud computing provides a benefit. It offers faster innovation, flexible resources, and economies of scale.
SaaS subscriptions include services that can be expensive to manage in-house. When you choose SaaS, they deal with all updates, software licensing costs and security, freeing up your business IT resources.
Cost and payback on investment
Cloud solutions have quickly become the most cost-effective. But that’s not the only financial benefit. Choose cloud computing and it has been proven that you will realise your initial investment faster. The payback period for cloud deployments is 2.2 times faster than on-premise.
SSG Insight – Nucleus found that cloud deployments have an average of 2.26 times lower total cost of ownership (TCO) compared with on-premise deployments.
Most businesses have ups and downs throughout the year. Because cloud computing is scalable, it provides the best option for fluctuating workloads. You typically pay only for cloud services you use, helping lower your operating costs, run your infrastructure more efficiently, and scale as your business needs change.
Ease of deployment
To grow, your business needs to embrace change. But change is always going to bring a level of disruption. With the cloud, this is minimised as once implemented it will bring easier upgrading, expanding and changing business applications. This means that after implementation you can use your time to focus on growing your business.
The future of cloud computing
Considering the numerous benefits that cloud computing offers, it’s easy to see why it is becoming the new norm. A decade since businesses first started to run on public clouds, many have discovered that cost savings were just the beginning. It is predicted that 83% of enterprise workloads will be in the cloud by 2020. Of that number, 41% will be run on public cloud platforms, 20% will be private-cloud-based and 22% on hybrid cloud platforms. The cloud makes it easier to deliver now commonplace business requirements, such as provision for disaster recovery and increasing demands for high availability.
If the value of a technology is the net experience it delivers – through efficiency, cost, deployment, flexibility and innovation – it’s clear why the cloud will be an important part of our future economy. In other words, the future will be definitely in the cloud.
SSG Insight – According to a survey by RightScale, 81 per cent of companies with 1,000 employees or more have a multi-platform strategy. By 2024, that number is expected to climb to more than 90 per cent. Between 2018 and 2021, worldwide spending on public cloud services is expected to grow 73 per cent from $160 billion to $277 billion.