Cloud computing is the process of outsourcing various computations through the cloud. Certain services, from processing power, to the storage of data, and even the entire running of applications is done through the internet on an on-demand basis, and these services are paid according to the requirements.
The core principle behind cloud computing is that the location of the computers providing the service is entirely irrelevant to the end-user, as the only thing that matters is the service, delivered through the “cloud” of the internet. This “cloud” reference is drawn from older telecommunications networks’ schematics, where the telephone network was represented as a cloud, and this terminology eventually became employed to refer to the internet.
While cloud computing as a term appeared only around the turn of the century, in the early 2000′ s after the internet boom, the idea of outsourcing computing and making it as a service has been extant as early as the 1960s, around forty years before the dot com boom. In those days, computers were large and extremely expensive, so computer bureaus would rent out their mainframe computers to various companies, allowing these companies to be able to use the mainframe on a timeshare basis rather than having to buy one for themselves, a purchase outside the capacity of all but the largest companies.
The service of time-sharing eventually was phased out due to the personal computer becoming affordable, as well as the rise of so-called “corporate data centers”, which allowed companies to store huge amounts of data, outsourcing their storage options. However, the concept of renting out computing services has never really gone away, as there have always been companies providing application services, utility computing services, and even grid computing services, as far back as the late 1990′ s, before the term cloud computing entered the mainstream.
Why Cloud computing?
This process has developed over time as a natural offshoot of the internet and all the possibilities the internet has to offer. Allowing for the development of cloud computing has been the natural progression, as it allows various companies to outsource certain processes, and it also allows certain companies to specialize in certain functions, making it a more efficient and economical process for everyone.
Firms that make use of cloud computing processes can dispense with certain investments, such as developing, establishing, and maintaining an information technology infrastructure, for example, which involves a high capital cost, as well as a fairly large maintenance cost, and instead simply pay another company to run it for them.
Similarly, companies providing cloud computing services can specialize in certain processes and products, and offer it to multiple clients, allowing for the economics of scale to kick in, making this system beneficial to both the companies providing and making use of cloud computing.
What are the services of Cloud computing?
While “cloud services” are known to most consumers as storage on the internet, such as your email storing files on the internet, or your smartphone automatically creating photo and data backups on the cloud, there are many other services available, especially to companies and corporations. At this point in the development of the internet, cloud computing covers almost any service that a client may need, from basic storage to processing, even to things as advanced as artificial intelligence and neural networking, or even as simple as office software such as word processing. Almost any type of service that can be delivered by a computer can now be accessed through cloud computing services.
Unlike regular consumers who don’t have much need for certain more specialized services, larger corporations such as Netflix have begun to heavily rely on services available on the cloud to run their video streaming service, as well as other businesses that rely on cloud-delivered computing and services. Some companies have started moving towards a greater reliance on the cloud to deliver their products, such as offering their services over the internet through a subscription model, rather than through a stand-alone, more permanent product, such as Microsoft 365, which allows users to subscribe to the Office suite of apps for an annual fee, with access to updated software as it comes out, as it comes out, as compared to the more conventional Microsoft Office product, which allows the purchaser of the license to use the software as long as they like, but only that particular version of the software.
How important to making use of Cloud computing?
As we become more and more interconnected, and as companies are continuing to innovate in the way they offer products and services, keeping up with the times has never been as important as it is today. Companies have begun to invest massive amounts into cloud computing, seeing it as the future of how industries will be run.
Over one-third of all information technology spending worldwide in the past year has been to develop the infrastructure necessary to support and maintain cloud computing services, according to the International Data Corporation (IDC). This spending, up to thirty-nine percent (39%) in the first quarter of 2017, has seen a large spike in growth, as compared to thirty-three percent (33%) in spending in the first quarter of 2016, the same period a year prior. In contrast, infrastructure spending for information technology in the non-cloud (I.e conventional infrastructure) segment dropped by eight percent in the first quarter of 2017, as compared to the previous year. The large growth in spending in infrastructure has a good reason: infrastructure sales for private cloud services grew by six percent (6%) to three-point one billion U.S dollars (USD 3.1 Bn), and sales to public cloud services grew by a whopping twenty one percent (21%) to four point eight billion U.S dollars (USD 4.8 Bn). Such large revenue returns have encouraged businesses to invest more and more into their cloud computing services. The largest growth by percentage has been seen in Canada, with a fifty-nine point one percent (59.1%) year on year growth, followed by Asia (excluding Japan) with an eighteen point seven percent year on year growth (18.7%), followed by Japan itself with a fifteen point three percent year on year growth (15.3%).
Further analysis of the cloud computing industry by Gartner has shown that over half of all global businesses currently using cloud computing services would have gone all-in on it and would have shifted entirely to cloud computing services in just a few years, by the year 2021. The global cloud services industry reached two hundred and sixty billion dollars (USD 260 Bn) this year, a large jump from two hundred nineteen point six billion dollars (USD 219.6 Bn) in the previous year. There have been projections that the worldwide figure for spending on the cloud services industry would jump to five hundred and forty – six billion U.S dollars (USD 546 Bn) by the end of 2018.
However, it is not sure what percentage of that growth is from vendors creating cloud versions of their standard product offerings as compared to business shifting towards cloud services, though it is clear that there is a growing reliance on cloud infrastructure, with businesses choosing to shift in that direction to be able to make more efficient use of their resources.
What are the advantages of Cloud computing?
Of course, given that there are multiple variants and models of cloud computing, the benefits for each type of model will vary, especially as their target markets differ. However, one benefit that all types of cloud computing services share is that it takes the burden of developing and maintaining computing infrastructure off of the company or the user. There will no longer be any need to buy and maintain servers, or to make sure that applications are up to date and bug-free, as all these will be handled by the cloud service provider. This is a huge benefit, especially for more specialized companies, as they will be more able to focus on providing their main product, rather than having their resources divided. Similarly, companies that specialize in cloud services will be better able to fulfill the information technology needs of companies, as their entire skillset and purpose rotate around being able to deliver efficient services to companies. This allows companies to focus on their main purposes, lowering costs, and reducing resource wastage, improving the agility of the various businesses.
While some companies may find it strange to begin outsourcing certain tasks and functions to another company, it would be well for them to remember that a large number of services have already been outsourced from the very beginning. Email services would be one of the more common outsourced services, as maintaining an internal email service is a cost and labor-intensive requirement, while numerous service providers can do the same thing for a fairly cheap price, lessening the burden on a company’s internal information technology staff or division.
Also, being able to outsource certain requirements instead of having to develop all of them in – house allows companies to save, especially when these requirements are seasonal – after all, it doesn’t make much sense for a company to invest resources and capital into developing certain IT capabilities when the use spikes at certain times in a year but is employed far less during off-peak seasons, as this would leave software and hardware idle, and idle assets of a company are assets that are not profitable. Instead, the ability to subscribe or buying to services on demand makes things much more convenient and allows companies to focus on their competitive advantages.
What are the disadvantages of Cloud computing?
Though there are many benefits to shifting to a more cloud-focused model, as seen by the high adoption rate, there are also admittedly a few disadvantages.
For one, cloud computing services are a constant cost, meaning that for as long as the company is using them, they will have to pay the subscription as well as any other related fees. While in many cases the cost is more economical as compared to investing in building an in-house software service, there are also some cases wherein the company would benefit more in the long run if they chose to develop their system, though this, of course, varies on a case to case basis and cannot be said to apply to every situation.
Another downside that may be seen with cloud computing is that by its very nature, it is an outside service, so there are sometimes some concerns about privacy or security of data. Some companies feel that the additional capital and maintenance costs involved in developing in house software are worth it, as they will be better able to control the security of their data.
There are also costs involved that a company may not be able to predict when shifting to a cloud-based service. These migration costs, where companies may find difficulties when migrating their data and services to the new cloud service, are an additional factor that will have to be taken into account when a company is deciding whether or not to shift to the cloud for one of their needs. Of course, this problem only exists for those that started using services with a more convenient service, as companies that began with cloud services will have no migration cost. However, it is notable that most companies feel that the migration costs are worth it and decide to move to cloud services regardless of any birthing pains that they may have when transferring to the new service.
One of the more obvious downsides of cloud computing as well is that access to the service will require a constant internet connection, which is normally not a problem in developed countries but can be an issue for developing countries with slower or unstable internet service.