How Does Cloud Computing Affect Companies? – 2024 Guide

Cloud Computing solutions such as SaaS, IaaS, PaaS, BaaS, DRaaS, among others, have become very important for every company, as it reduces the total cost of ownership (TCO) while increasing agility, flexibility and service innovation.

What is Cloud Computing, and what is it for?

It is creating virtual versions of an operating system or hardware platform, i.e., an organization could have the same computing capacity of several computers with an operating system such as Windows, without owning a physical computer.

The virtualization technique simulates through software all the components that a physical computer would have: CPU, RAM, Hard Disk, Motherboard, NETWORK, among other features.

The resource that allows us to perform virtualizations is called Hypervisor or VMM (Virtual Machine Monitor). In addition to simulating the functionality of a physical computer, virtualization also will enable us to use more than one operating system in the same storage space.

In this way, we can have a 500 GB hard disk and use virtualization to use 60 GB in other operating systems such as Linux or secondary Windows that use different applications.

The most significant benefit of virtualization is to have several operating systems with the same computational capacity and have different virtual machines that can be accessed from anywhere through the Internet.

This benefit is granted thanks to the implementation of highly reliable data centers and the correct configuration and protection of a cloud computing service.

In the current pandemic scenario, adopting these cloud technologies has allowed many companies to cope with the situation and stay operational during the most challenging days.

Benefits of implementing a cloud computing solution

Employing these two technologies in parallel can provide your organizations with higher levels of security, productivity, availability and use of other resources that are part of your digital transformation strategy.

Efficiency and cost reduction

By implementing the data centers of a Telcom specialized in the corporate sector, you can be sure of the efficiency of the systems to employ the resources and storage capacity of the cloud.
By following a service model, companies opting for an enterprise cloud solution will not have to pay for the maintenance and upgrade of physical equipment.
For these reasons, an organization benefiting from these technologies can increase its efficiency, significantly reduce its costs and focus its activities on its core business.

Higher level of information security

Having the company’s data stored in the cloud allows for a higher level of security. It makes it possible to safeguard information by analyzing the users’ connection points. It also makes it possible to block stolen or breached devices.

In addition to this security control, having virtualized information makes it easier to incorporate a series of solutions such as the Next Generation Virtual Firewall, making it possible to protect information from various computer threats.

The internal security of the data center is also highly rigorous as it is protected by WAN and LAN connectivity elements, management and service networks, and other segmentations.

Scalability

Organizations have different requirements. In that sense, storing their data through the cloud allows them to pay exclusively for the storage capacity used. If they need to increase their computing capacity, they only have to request it and increase the monthly service cost.

Scalability benefits companies with fluctuating storage space consumption and reduces the risks associated with internal operational problems and maintenance.

Mobility

Storing an organization’s data in data centers and accessing it through cloud computing solutions allows access through mobile devices and personal computers from different locations. Thus, both employees and executives will not be limited to a physical space to consult valuable information or use their organization’s resources.

A survey conducted by Fortune 500 reveals the expectations of the CEOs of the 500 largest companies in the world: 26.2% of respondents believe that office activity will never be the same as before.

Consequently, we assert that ensuring your organization’s mobility and secure access to data is a priority in the digital transformation process.

Disaster recovery

Uncertainty and the risk of information being affected by force majeure, such as natural disasters and power outages, are significant concerns for organizations using technology to improve their production and communication.

Competitive advantage

Migrating information and services to the cloud presents benefits for different areas of the organization. In this sense, companies that choose to work with data centers and cloud technology will manage their information in a flexible, distributed, scalable way and at lower maintenance costs than their competitors.

It would be reflected in the use of the cloud by leading companies in different sectors. Some of the companies benefiting from virtualization are:

• McDonald’s: Developed a home delivery system through the cloud and whose scalability would allow it to serve 20,000 orders per second.
• Finra: The U.S. stock market regulator used the cloud to have a system that allows it to perform 500 billion verifications per day.
• 21st Century Fox: saved more than 25% in storage costs by upgrading its infrastructure and platform services.

Impact of Cloud Computing by business vertical

It should be noted that each organization is a different universe concerning its needs. There will be companies that will feel identified with Cloud Computing and will adapt in the best way. But at the same time, there will be others that do not see Cloud Computing as an advantage due to the specialization of their work.

Adopting cloud technologies in organizations brings with it the disappearance of some jobs in companies and, at the same time, the emergence of new jobs.

However, the traditional role of the CIO (Chief Information Officer) remains, but with a slight shift towards a more executive attitude, oriented towards a strategic vision with the customer.

Next, we will analyze the impact of Cloud Computing by some business verticals:

Startups

Thanks to cloud development teams, startups will access high-powered cloud services paying only for what they use.

Cloud Computing architecture, high levels of availability, and its on-demand costing scheme mean that almost any startup can compete on equal terms with large companies without the need for large budgets.

For example, a successful startup will no longer need to acquire expensive equipment to process information. Now it will be able to process large volumes of data with analytical technology under a cloud infrastructure to identify problems in its operation or business processes, all this paying only the computing power it uses.

IT Consulting Firms

These organizations also benefit from Cloud Computing, designing various services and products for their clients while managing migrations from physical Data Centers to a multi-cloud architecture.

After advising their clients, they can redesign legacy processes to align with the new architecture and integrate IT governance to ensure business adaptability with the latest technologies.

Education

Cloud computing has already begun to solve the various challenges faced by educational institutions, not only in reducing internal problems but also in offering new opportunities.

Schools, colleges, universities, and institutes are undergoing a profound transformation due to the global health crisis forcing educational institutions to go online.

It brings these organizations to adopt Cloud Computing for video conferencing, web servers for virtual classrooms, storage for receiving and sending work, cybersecurity to protect their data, among others.

Cloud Computing and e-Learning have caused the world’s largest publishers to work together with software and hardware providers to move away from printed textbooks, preferring digital alternatives. It would help lower costs for schools and learning centers, as students and teachers can access books and teaching materials from their mobile devices.

It would enable resource sharing and save money on purchasing individual copies of critical texts and books.
Software developers

The reduction of investment represented by Cloud Computing and the low cost of innovation accelerates the consumption of all types of applications that need infrastructure and platforms to operate.

It increases the demand for this type of business where it is much cheaper to deploy, in production, the developments with a cloud infrastructure than with its infrastructure.

For example, suppose a development company needs a specific computer configuration for testing some software. In that case, it can do it without any problem by renting a virtual machine and configuring itself according to its needs for a few dollars, without the need to buy equipment.

Government

Cheaper processors, faster networks, and the rise of mobile devices are driving innovation faster than ever before. Cloud computing is an important manifestation and enabler of this transformation. Just as the Internet has led to new business models that were unthinkable 20 years ago, cloud computing will affect and reorganize entire industries in unpredictable ways.

Public organizations are in a unique digital transformation process, e-government has been a reality for decades, but implementation costs have been reduced.

Thanks to cloud services, these organizations can access solutions that years ago were impossible for them, making use of public and private clouds to improve E-Government.

The definition of a Cloud Governance model will guide public sector CIOs on their way to cloud adoption.

In this way, the public IT organization will have a guide that will allow them to manage and control cloud services while mitigating risks and increasing alignment with the business.

Retail

Mass merchandisers have seen a great opportunity with Cloud Computing, allowing them to expand their services beyond physical locations, deploying applications and solutions that will enable them to optimize processes that ensure business continuity in pandemic scenarios.

Right now, retailers are working with cloud technologies to:

• Sell more products, thanks to improved marketing strategies and more channels of communication with customers.
• Optimize stock, thanks to the data they collect with these technologies. They can know what kind of products sell more, what size, or the average price consumers will pay.

A business model is necessary to drive business innovation. One of the main reasons is cost savings on hardware elements that deteriorate over time, which does not happen with a Cloud Computing system.

Moving to the cloud involves virtualization of your infrastructure and involves people, processes, centralization, and control. Therefore, we recommend five steps for the successful migration of your organization to the cloud:

1. Fiber optics:

Before deciding to migrate to the cloud, you should verify whether your current Internet connection can handle the capacity needed to support the process. Considerable bandwidth and optimal service level are requirements that every company should consider before migrating to the cloud.

2. Size of the organization:

The migration should be planned considering the number of employees of the organization and the services to be used in the short, medium, and long term. Otherwise, the migration could be affected, either due to lack of capacity or oversizing.

3. Previous training:

Collaborators need to receive information on how the cloud works and how to make the most of the advantages of the service, especially on security measures to avoid incidents.

4. Evaluation and monitoring:

Review the quality of the service frequently. It will avoid unexpected situations in the future. It is vital to check what kind of infrastructure the office has and if it is optimal to implement a cloud service.

5. Consider cybersecurity:

The organization must consider that it is essential to prevent the loss or leakage of information in cloud implementation that can occur by phishing, malware, ransomware, and other threats.

Conclusion

Is cloud computing impacting companies? It’s safe to say that the global pandemic has proven effective for all types of businesses, providing multiple economic, operational, and collaboration benefits, enabling enterprises to continue to operate in an agile telework environment.