The cloud started as a buzzword and has become a mantra for CFOs and CEOs looking to impact their bottom lines. But how exactly does the cloud make a company more efficient? As you know, the cloud is the state of the art approach to web hosting. Whereas previously all web hosting had focused on renting entire servers (dedicated hosting), or fractions of the resources (RAM, disk space, bandwidth, etc.) available to a server (shared and VPS hosting), the cloud puts all servers together in a single network and pools resources, which are then sold to people based on what they use.
The Cloud - A New Paradigm
This new paradigm has been exploited in many ways, particularly in offering services to businesses. AWS, Google and Microsoft all have cloud services where businesses can host websites and business apps. But the proliferation of providers offering software and solutions that were previously more typically software solutions that were loaded onto a single computers show that the cloud offers businesses the opportunity to be more efficient. Salesforce, Office365, Google Apps - all are geared at help staff within a business work more efficiently through improved communication and collaboration. So, in what ways can the cloud make a business more efficient?
1. Focus on Core Competencies
The cloud allows companies to focus on core competencies. This means a clothing factory no longer has to maintain an IT department or IT staff - they simply allow third-party companies to provide those services in-house IT department was previously responsible for, and generally at great cost. Businesses can now focus on what they do best without the distractions of fighting their own technology.
2. Saving Costs
The fact is that many services offered via the cloud are paid for on an 'as-used' basis, meaning people pay for what they use. However, this is not always the case - services like Microsoft365 are provided on a subscription basis. If a company saves money directly that is a boon, but often costs are the same. However, cost savings from increased efficiency is where the cloud impacts a company's bottom line most.
3. Improving Efficiency
Generally, when data (files, pictures, etc.) is in the cloud, it is accessible not only from a PC, but a mobile phone, a tablet, a phablet, a laptop - in fact any type of mobile device that is currently available on the market. Whereas the traditional office scenario was people "popping in" to the office over the weekend, the cloud means they now don't have to. The office, and the work they need to do, is available 24/7 and from any location where there is connection to the Internet. A company's staff can work anywhere, anytime, for as long as they want, and without even the cost of the office air-conditioner being switched on.
4. Reducing overheads
In fact, some offices have gone as far as to enable staff to avoid the workplace entirely. Until fairly recently most of Yahoo was driven by "Telecommuting" - where staff work at home rather than come into the office. Yahoo CEO Marissa Mayer caused uproar by banning telecommuting within Yahoo in 2013, and probably rightly so - a huge corporation shouldn't run in that fashion - but for startups and smaller SMEs it means the potential of starting businesses without the need of a costly physical location. But for established companies, the ability to avoid, for instance, having a company server means a reduction in cooling costs for data center environments they were previously required to maintain and the cost of staff they used to hire to keep everything running smoothly - again, an enormous impact on the bottom line.
5. Safety and Security
Although the cloud has been having a rough time promoting its security credentials of late, the fact is vulnerabilities similar to those experienced in the cloud cause problems for all companies' physical IT departments. Servers and PCs have to be maintained. Without regular software updates and patches, computers that are connected to the Internet are vulnerable to exploitation by hackers through malware and other security threats.
Running software in the cloud means it is the cloud provider's responsibility to update and patch software, and with economies of scale, they can do so more effectively than any IT department ever could. Again, with IT drawn away from the daily grind of maintaining severs, etc., their talents can be put into something more meaningful, and something which will impact the company's bottom line even more.
6. Document Control
With documents in one centralized location (i.e. the cloud), managing documents becomes more efficient, as does managing who has access to sensitive materials and who does not. No longer are documents sent between department (and indeed facilities) via email. Making sure only the people with the authority to see sensitive information get to see it is more easily managed in the cloud.
The cloud levels the playing field. These days, thanks to the cloud, a start-up operation of 5 people working in different locations (perhaps even on different continents) have access to the capabilities huge corporations have spent decades and hundreds of millions of dollars to develop.
Only 5 years ago, who could have benefitted from being able to find actionable meaning in "Big Data"? Very few. These days even students can perform calculations that predict things as complex as weather patterns or determine hidden meaning from decades of sales and customer-related data.
8. Green Credentials
The cloud has substantial "Green" credentials. In an era where web hosts have spent millions hiding data centers in caves and underground to reduce cooling costs, the centralized nature of the cloud means that it is more energy efficient. This is not only important to the members of the environmental movement, it impacts companies' bottom lines. Many areas of business require environmental certification like ISO 14000. Using the cloud means efficiencies are passed on to companies making achieving awards like ISO 14000 that much easier.