April 15, 2024

Is cloud computing improving business performance enough?

By nicolas larseninternational banker

FNew technologies have proven to be more transformative to business growth potential than cloud computing in shaping the digital transformation journeys that businesses around the world have embarked on. By enabling the delivery of crucial services over the Internet, the cloud has become the preferred online home for important software, servers, platforms and infrastructure, which now seamlessly deliver services to customers, enabling significant cost savings for companies and helps support important businesses. scalability.

By securing data in the cloud, users can access applications over the Internet instead of hosting them locally through their own hardware. The virtual nature of cloud computing thus helps organize data and applications in a more agile way. The cloud itself can be private, so the network is confined within a company’s infrastructure, or it can be public and use the Internet to store data and grant access to applications. Enterprises can also adopt a multi-cloud system that facilitates multiple public cloud services.

Anyone with an Internet connection can run these apps from anywhere in the world, whether checking email through Gmail, listening to their favorite songs through Spotify, or watching beloved movies courtesy of Netflix. These forms of data can be accessed seamlessly through cloud-based servers. By hosting such services on multiple cloud servers rather than relying on single servers through individual apps or websites, the service can remain uninterrupted on additional servers in the event that one goes down.

Among the biggest beneficiaries of cloud computing is the “everything as a service” (or “everything as a service”) (XaaS) revolution, which enables products, innovations and tools to be delivered to users over the Internet. Among the most popular types of this delivery model are:

  1. Software as a Service (SaaS): Software is distributed through a cloud provider that is used to host applications and provide them to users over the Internet. Examples include Google Apps and Microsoft 365.
  2. Platform as a Service (PaaS): Software and hardware resources for developers to build and run applications are provided in the cloud, such as Amazon Web Services (AWS) and Salesforce’s Heroku.
  3. Infrastructure as a Service (IaaS): The cloud provider offers crucial IT (information technology) infrastructure, such as storage and networking resources. AWS’s Elastic Compute Cloud (EC2), for example, provides scalable compute capacity in the AWS cloud.

Many of these services are proving very popular with users because they can be offered through a pay-as-you-go subscription model, so customers can select the cloud computing services that best align with their on-demand needs.

Meanwhile, on the supply side, highly flexible cloud computing infrastructure (typically through virtual servers and pay-as-you-go cloud storage) makes scaling up or down much easier in response to demand. consumer demand, supporting various application loads. This flexibility often proves to be a huge cost-saving advantage for companies, as they can scale without purchasing additional physical hardware, instead spending money and resources on the most important value-generating aspects of their businesses. In fact, much of the physical IT infrastructure that businesses typically rely on can be discarded by migrating to cloud computing, while businesses can also save substantially on costs and space by not having to run servers and IT systems. Large-scale storage in on-site data centers. .

Organizations can also remotely access necessary resources through the cloud. This can be a huge advantage for multinational companies looking for greater collaboration across their global locations; Since every file and application is available on demand, cloud computing goes a long way to supporting decentralized work environments. It also greatly supports the popular post-pandemic remote work trend, as employees can now access business resources from anywhere with any device and at any time. These employees have more flexibility in their work schedules, which, in turn, drives greater productivity and creates happier workforces with higher staff retention.

With little need to purchase additional hardware or software upfront to enable cloud computing, plus potentially considerable savings on overheads such as space, cooling, and lower capital outlays on IT staff (many of which can be passed on to the IT provider). cloud), operations and maintenance costs can be significantly reduced. According to the “KPMG Global Technology Report 2023,” over the past 24 months, 64 percent of 2,100 business executives from 16 countries surveyed confirmed that public cloud and XaaS technologies had positively impacted their profitability and/or performance.

However, companies face significant challenges when implementing cloud services. In July, French IT company Thales published its “Cloud Security Study 2023,” providing its annual assessment of the latest emerging cloud security threats, trends and risks based on a survey of nearly 3,000 IT professionals. security and IT in 18 countries. The study found that 39 percent of companies experienced a data breach in their cloud environment last year (up from 35 percent reported in 2022), and more than half (55 percent) of Companies cited human error as the leading cause of cloud data breaches. the respondents. And 38 percent ranked SaaS applications as the top target for hackers, closely followed by cloud-based storage at 36 percent.

This shows that cloud services are far from ideal. By entrusting storage and maintenance to third parties, companies will always be concerned that their data is not sufficiently protected, and Thales statistics show that they have every reason to remain wary. Human error, hacking attacks, and insufficient encryption are just some of the factors that keep businesses skeptical about cloud providers’ ability to effectively protect their sensitive data. These trends are also being laid bare at a time when companies are reporting dramatic increases in the level of sensitive data stored in the cloud: Thales recorded a whopping 75 percent of companies confirming that more than 40 percent of their data stored in the cloud are classified. as sensitive, significantly more than the 49 percent of companies that reported the same in last year’s study.

However, cloud providers are implementing solutions to these issues, as they strive to improve their security credentials, particularly around identity and access management (IAM), to mitigate data breaches. In fact, the Thales study found that robust adoption of multi-factor authentication (MFA) had increased to 65 percent among respondents. But only 41 percent of organizations had implemented zero trust controls in their cloud infrastructure, while only 38 percent used such controls within their cloud networks.

Vendor lock-in remains another distinctive problem for companies using public cloud services, and typically arises when the costs of switching from one provider to another are so high that the company remains stuck with the original provider, even if the quality of the service is far from that of the market. major. This is reportedly often experienced by those using cloud services, and the costs for businesses to securely migrate their databases from one cloud provider to another are enormously expensive. The problem becomes even more evident in the long term, especially considering that cloud computing prices had been declining noticeably until recently, so companies stuck in contracts with mediocre cloud providers at non-competitive prices continue to coming out losing.

According to PwC (PricewaterhouseCoopers), implementing a multi-cloud solution so that companies can diversify their cloud computing exposures across multiple providers is the best solution to avoid vendor lock-in. “By spreading systems across multiple cloud platforms, the transition between service providers will be more feasible if better opportunities present themselves,” the UK consultancy noted in 2021. “Configure the cloud architecture to maximize portability and Interoperability is crucial to enable this.”

However, the advantages of cloud computing far outweigh the disadvantages for businesses, as the trend towards cloud deployment in 2023 continues strongly, and is expected to do so for years to come. According to market researcher Fortune Business Insights, for example, the global cloud computing market was valued at $569.31 billion in 2022 and is projected to grow from $677.95 billion in 2023 to $2,432.87 billion in 2022. 2030 at a compound annual growth rate (CAGR) of 20. percent over the forecast period.

The market research firm’s May 2023 study cited the healthcare industry as the fastest-growing sector due to its increased deployment of cloud-based software, mobile applications, wearable health devices, and smart healthcare equipment, among others. “Other industries, such as retail and consumer goods, BFSI [banking, financial services and insurance]”Government, government, manufacturing and other businesses are expected to grow at a significant pace, due to increased government and cloud provider initiatives and investment plans to support cloud adoption among startups,” it notes. also the report.

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