Cloud computing has revolutionized the way businesses use computer systems. Hardware is no longer purchased or exploited in-house. Instead, XaaS (X-as-a-service) models are used: computing services are rented on the basis of virtualized operating systems and hardware. Cloud computing makes possible the storage and processing of data, as well as the hosting of applications and interfaces. Ultimately, cloud computing offers many advantages, but it also has some disadvantages.
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Advantages of cloud computing in economics
For many organizations, the immediate benefits of cloud computing are financial. There are also other advantages, which we will discuss below. It is always advisable to weigh the pros and cons of using the cloud. When considering the economic benefits, a distinction must be made between using a public cloud and a private cloud. The first can be used immediately without large acquisition costs. The second, on the other hand, requires an investment to create its own structures.
Better products and services
For most companies, technology is a means to an end. Actual products and services are not usually technological in nature. For these companies, the ideal is that the technology becomes invisible. The cloud makes this possible.
The use of cloud computing allows companies to pay less attention to technical aspects. In this way, all the effort can be applied to the main tasks of the company. This translates into better products and services and greater efficiency. A higher proportion of the resources used contributes directly to success.
Imagine a large chain of bakeries. You may need IT skills for logistics, sales, marketing, etc. Instead of operating your own servers or data centres, using cloud resources can be a good option. The exception is technology companies. For these, it can be positive to build and operate their own resources. Still, private cloud solutions can be attractive today as well.
Increased flexibility
The use of cloud computing allows greater flexibility. The necessary IT infrastructure is readily available and can be expanded as required. In this way, it is easy to act immediately on possible improvements and risks. Traditionally, investments in IT infrastructure in a company led to a new permanent technological state. This was maintained for quite some time, as large investments had to be made to implement new advances in technology.
Cloud computing makes it possible to apply changes more quickly. Companies can adapt to the market without having to plan, approve and build infrastructure. With the elimination of these lengthy and costly processes, the technology directly serves the implementation of the strategy.
Lower costs
The use of cloud computing usually reduces costs. This is because the acquisition and operation of IT infrastructure are largely eliminated. You only need to purchase “thin clients” for your employees. In most cases, any modern device with a web browser will do. Saving your own hardware is accompanied by a rationalization of IT staff. In addition, the focus shifts away from maintenance and network technology to more direct support for employees.
Cloud services increase based on load. Therefore, it is not necessary to maintain the excess capacity of the company. Whether you rent additional servers or expand existing ones, this is all done automatically or with one click. The use of cloud computing is especially attractive for startups. Saving on your own hardware reduces the initial capital required. A new company may initially rent infrastructure and services on a small scale. As the business grows, the services purchased can be expanded.
More sustainability
When used to its fullest, cloud computing also brings sustainability. Sharing large data centres in the cloud is more efficient than managing individual data centres in individual companies.
Large data centres have better options for waste heat management and on-site power generation. As an example, we can consider Icelandic data centres that use geothermal energy. Old equipment is also easier to recycle when purchasing new hardware. In general, the use of virtualization reduces the need for individual devices.
Advantages of cloud computing in an organization
The economic benefits achieved through the use of cloud computing apply to the entire company. But there are also many benefits within the organization. Digital technology is the backbone of communication and data exchange in the company. Cloud computing enables departments and employees to work together more quickly, reliably and easily.
Consistent data management
With cloud computing, organizations are trying to achieve consistent data management. The term “data” has been on everyone’s lips in politics and business for years. Decision-makers often mistakenly assume that more data automatically leads to more profits. However, data is only useful if it is managed sensibly. Otherwise, you will find yourself with a lot of not so useful data. Without sound management, data is more of a burden than a benefit.
The intelligent use of cloud computing helps to apply uniform solutions across the enterprise for storing and evaluating data. On the contrary, the use of isolated organic solutions can easily lead to chaos. Different data management approaches used in parallel tend to accumulate large amounts of dark data. This data, which exists outside the intended systems and processes, is a drag.
In large part, web-based formats, user interfaces, and APIs are used to manage data in the cloud. These are usually based on open interfaces. In this way, it is clearer what data is in each place and how it is accessed. However, for optimal data management, employee involvement is essential. No technology, no matter how sophisticated, can replace well-defined processes and good documentation.
Better collaboration
If data and services are hosted in the cloud, access is usually through web interfaces. This makes it easy for employees to work from anywhere. Whether it’s field staff, homeworkers, or digital nomads, they all use the same web-based workflows and tools they’re familiar with. If necessary, a company-owned virtual private network (VPN) can be used as an intermediate option.
The basic tool for accessing cloud-based services is the web browser. Only simple hardware is needed for its operation, even a tablet can be enough. Mobile devices are cheaper, easier to maintain, and more portable than traditional desktops. Most of the data is stored in the cloud and not on the device itself. Cloud storage often creates automatic backups and reviews when data changes. This reduces the risk of employees inadvertently causing information to be lost.
Advantages of cloud computing in security
Security and data protection are important issues in the digitized society. Using the cloud is often advantageous in this regard. However, precisely this idea is difficult for many people to understand, because the cloud is “invisible”. Where exactly is the data? Viewed objectively, the cloud offers numerous advantages in terms of security and data protection. As always in computing, it must be borne in mind that “there is no magic”. The advantages of technology demand that it be used with care and attention, also and especially when it comes to the issue of security in the cloud.
Greater data security
Data has become a hotly contested asset. Criminals are dedicated to stealing data to misuse or sell it. In addition to the users directly affected, the companies involved may also be harmed. There are significant fines, as well as legal consequences. Oftentimes, the worst consequence is the loss of customers, a dirty image, or a loss of customer trust due to data breaches and hacks.
Large cloud providers use resources to protect themselves from hackers and other attackers. They use their departments with the best specialists and the latest technology, aspects that a small company cannot achieve. Another advantage of using the cloud is the standardization and certification of the systems used. If you build your own infrastructure, you have to certify it in a very expensive way. This makes subsequent adjustments to the system difficult, as the certification process may need to be repeated.
Better data protection compliance
Since data is invisible, protecting it is often a difficult subject. The company is always responsible for protecting the data collected. The best ways are based on incorporating data protection into structures from the beginning. A commendable goal, but a great job for one company. It’s easier to trust established cloud systems.
Cloud provider systems are certified according to official standards. Suppliers go to great lengths to ensure regulatory compliance, with their own legal department and security and technology experts. This guarantees a high degree of reliability.
More reliable disaster recovery
In computing, the term “disaster recovery” refers to a rescue process: if a catastrophe occurs, how do you return to the original state? With the cloud, disaster recovery is often easier, faster, and cheaper. What was previously only possible for large companies is now available to the general public.
Cloud providers are based on globally distributed systems. The data and services are available in multiple copies. This means that there is no “single point of failure”, that is, there is no Achilles heel that kills the entire system. Thus, even if a server or data centre fails, there is usually no permanent loss of data or capacity.
The inherent scalability of cloud services enables rapid response to failures. Backups integrated into the infrastructure allow data to be restored.
Advantages of cloud computing in technology
In addition to the economic and organizational aspects already mentioned, there are also purely technological advantages. Ultimately, the cloud relies on technological progress. Thus, the technologies are used also to determine the opportunities.
Optimized big data management
Big data management poses serious challenges for organizations. When we talk about big data, we are effectively talking about large amounts of data. It can easily be a petabyte (thousands of terabytes) or more. Cloud computing offers many advantages in these cases.
Capturing, storing, processing and retrieving large amounts of data requires a special infrastructure. The implementation of this system is very expensive for a company. In many cases, it is more attractive to use existing XaaS solutions from large vendors. One characteristic of big data is that it often integrates large amounts of data in a short time. Therefore, it is very important to be able to easily increase storage and compute capacities. This is usually only possible with cloud solutions.
Better DevOps
Modern development projects involve other types of specialists in addition to programmers and project managers: the so-called DevOps engineers. The main purpose of DevOps is to provide and keep in place the frameworks for the development and operation of the software. The use of cloud technologies is essential for this.
The development of cloud computing took place together with the fusion of approaches for its development and implementation. Above all, the emphasis was on container-based virtualization. In this way, the software is developed in a local environment and subsequently runs in a distributed system in the cloud. The basic technologies are similar in both cases. With the cloud, however, the approaches become more powerful and, above all, can be scaled up.
The developer’s lovers often want to use the latest technologies for their projects. However, traditionally the obstacle was that the necessary structures had to be created within the company first. This obstacle largely disappears when using the cloud. This makes it easier for companies to stay up to date. This is an attractive advantage that helps accelerate development projects and attract talent.
What are the disadvantages of cloud computing?
Like all technological innovations, cloud computing also has disadvantages. If the services and infrastructure are rented and not operated by the company itself, there is a dependency on the providers involved. For companies focused on technical products, the loss of control that this entails may not be beneficial.
To some extent, vendor lock-in approaches protect against the dreaded “infrastructure as code”. This means that it is still possible to switch providers or move to your own private cloud. In so-called multi-cloud and hybrid clouds, systems and data are spread across multiple private clouds and public clouds. This helps reduce dependency on individual providers and maintain sovereignty over the data itself.
Cloud computing provides companies with an unprecedented level of flexibility. However, keeping pace with technological development also creates great pressure. New methods and approaches are constantly being added. The technology that is used today may become obsolete after a few years.