What Is Cloud Computing? Explaining the Benefits and How to Execute a Cloud Strategy

Cloud computing has spread rapidly over the past several years. This article explains what cloud computing is, its benefits, and how to execute a cloud strategy. Let's get started!

1.　What Is Cloud Computing?

Cloud computing means delivering computing services — servers, storage, databases, networking, software, analytics, and intelligence — over the internet (the "cloud") to enable faster innovation, flexible resources, and economies of scale.

2.　The History of Cloud Computing

The term "cloud computing" emerged in the early 2000s, but the concept of computing as a service goes back much further.

These "time-sharing" services were largely overtaken by the rise of PCs, which made owning a computer more affordable, and later by the rise of data centers that let companies store massive amounts of data.

Even so, the concept of renting access to computing power resurfaced repeatedly through application service providers, utility computing, and grid computing in the late 1990s and early 2000s. Cloud computing then emerged and truly took hold with the arrival of Software as a Service and hyperscale cloud computing providers like Amazon Web Services.

3.　Main Types of Cloud Services

Cloud computing comes in several types, each built to solve different problems. Broadly speaking, there are three main types.

• IaaS (Infrastructure as a Service): Infrastructure as a Service

The official definition of IaaS is as follows: IaaS (Infrastructure as a Service) delivers compute, memory, storage, networking, and related software such as operating systems and databases as a cloud service, replacing the infrastructure of a traditional on-premises data center.

Put simply, IaaS is essentially a virtual server that customers rent from another company that owns the data center. In essence, IaaS promotes access over ownership.

This solution gives end users the flexibility to host custom-built applications or standard software, while also providing general-purpose data centers for storage.

IaaS can be deployed under any of the three service models defined by the U.S. National Institute of Standards and Technology (NIST).

• PaaS (Platform as a Service): Platform as a Service

PaaS stands for Platform as a Service Provider — an online platform that lets individuals and businesses develop, manage, and optimize applications without purchasing the underlying infrastructure.

Customers can deploy PaaS under any of the three cloud deployment models defined by the U.S. National Institute of Standards and Technology (NIST).

• SaaS (Software as a Service)

SaaS is a software delivery model in which a third-party provider builds an application on cloud infrastructure and makes it available to customers over the internet.

This means the software doesn't need to be installed on a local machine like traditional software — you can access it from any device with an internet connection and a web browser.

Customers can deploy SaaS under any of the three different models defined by the U.S. National Institute of Standards and Technology (NIST).

And there's a fourth type that's rapidly gaining adoption.

4.　Benefits of Cloud Computing

4.1　 Low Cost

One of the most commonly cited attractions of cloud-based services is their low cost, and in many cases that's true. Companies considering an investment in SaaS (Software as a Service) can reduce costs and expect a strong return, since the standard pay-as-you-go model means you never pay for what you don't use.

When it comes to infrastructure, things can get a bit more complex depending on your business requirements. PaaS (Platform as a Service) and IaaS (Infrastructure as a Service) can be cost-effective for many larger companies with more comprehensive needs, sometimes helping them avoid expensive software, licensing, and installation costs.

For small and medium-sized businesses, on the other hand, this can end up costing more than simply setting up a local server. That's why cloud-based SaaS solutions tend to be a better fit for smaller businesses.

4.2　 Flexibility and Scalability

Using a cloud provider instead of a local server brings businesses significant flexibility. As business demand shifts, cloud services can adapt, keeping pace with increased usage and activity as the business grows.

Cloud-based applications and services can be purchased on demand and billed on a pay-as-you-go basis, so businesses aren't locked into expensive investments that may no longer serve their purpose later on.

What's more, cloud computing offers significant scalability, and it can scale in both directions. If your needs change significantly throughout the year, your cloud computing spend can reflect that — for example, you only pay for the data storage you actually need at a given time.

4.3　 Data Management

The average cost of a data breach is said to be around £3.12 million, making it one of the biggest concerns in business today.

If you store all your critical data locally, losing it to hardware failure, human error, or a cyberattack can put you in a genuinely difficult position. Cloud-based servers centralize all your data and make it easily accessible from any internet-connected device.

For this reason, cloud computing is now commonly used for data storage, not just as a backup solution for keeping data safe. Keeping backups offsite and disconnected from the network also means that even in the event of a ransomware attack, the malware won't be able to access your backup data.

4.4　More Effective Collaboration

Cloud computing services are highly effective at facilitating collaboration. Since all files and documents are stored in one place, team members can view and edit the same information. Revision and update history is also preserved, making it easy to see what's happening and avoiding the confusion of multiple versions of the same file.

With cloud services, you can collaborate not only with internal teams but also with customers, partners, and suppliers through fully encrypted, end-to-end secure channels.

5.　Drawbacks of Cloud Computing

5.1　Security and Privacy

Companies moving to the cloud worry about the security of their company's and customers' sensitive data. What should we make of the fact that as many as 66% of IT professionals see security as a significant barrier to cloud adoption?

Yet public cloud providers invest far more in security than any single company or government agency could. Microsoft, for example, invests $1 billion a year in cybersecurity for its Azure Cloud platform and successfully defends against 7 trillion cyber threats a day. Amazon and Google likewise invest heavily to keep individual and business data safe. Moving to the cloud, then, doesn't weaken security — it strengthens it.

5.2　Vendor Lock-In

Vendor lock-in remains a major concern for many businesses. Entrepreneurs worry that moving all of their systems to the cloud will tie their company to a single vendor. This is a significant concern, especially given that cloud service costs continue to steadily decline worldwide. Amazon founder Jeff Bezos even coined what's known as "Bezos's Law": the cost of cloud computing halves roughly every 18 months.

Adopting a multi-cloud solution is a strong way to address this problem. Hosting your systems across multiple cloud platforms makes it easier to migrate between service providers.

5.3　ROI

Cost concerns can be broken down into a few areas: "adoption," "structure," and "ROI." The cost of adopting the cloud comes with any technology rollout, so we won't dwell on that here.

What's different is the cost structure across the lifecycle of these solutions. On-premises technology typically requires a one-time upfront investment, while the SaaS model is based on recurring costs. This isn't a drawback in itself — it's simply something to plan for. That said, the "hidden" costs associated with on-premises technology (such as maintenance and upgrades) disappear in the cloud. Eliminating capital costs means cloud computing tends to be cheaper in the long run.

ROI depends on how you've built your cloud strategy and whether you have a strong business case behind that decision. But if you do, the ROI on your cloud investment becomes very real.

6.　Executing a Cloud Strategy

We've also put together the 6 phases needed to execute a cloud strategy.

6.1　Conduct an Assessment

At this stage, you assess the impact of executing your strategy across three areas: cost, architecture, and safety. It's important to get expert help with this assessment. If the results show that your business can move to the cloud smoothly, move on to the next step.

6.2　Validate the Concept

In this phase, you develop a cloud strategy within your organization and roll it out on a trial basis. Take your time introducing it to your team and build support internally.

6.3　Migrate Your Data

Using the available storage options, find the safest one that fits within your budget. Once you've confirmed there are no issues with your data, migrate it to the cloud.

6.4　Migrate Your Applications

Migrating applications requires choosing the migration approach your organization needs to adopt. That might mean a strategy of moving everything to cloud servers, or a hybrid approach where some functions move to the cloud while others remain on your organization's own servers.

6.5　Leverage the Cloud

In this phase, you use the tools provided by the cloud framework to automatically scale functionality. Cloud servers offer high elasticity and scalability, and should be used to maximize the benefits for your organization.

6.6　Optimize

At this stage, you tune and optimize your system to make the best use of available resources, monitor performance to catch anomalies early, and redesign any parts of the cloud migration that aren't performing as expected.

7.　Frequently Asked Questions About Cloud Computing (FAQ)

8.　In Closing

If a company assesses its risks properly, configures its platform correctly, and keeps full visibility across everything, it can quickly identify and mitigate risks the moment an inevitable threat is detected, significantly reducing the impact on the business.

If you're considering a move to the cloud and want to learn more about the security solutions needed to reduce risk, please consult our experts.

Contact: sales@miichisoft.com