How Cloud Computing Improves Business Efficiency
Business efficiency is accelerated through the use of cloud computing. What is cloud computing? Tech Target offers an elegant definition: “Cloud computing is a general term for the delivery of hosted services over the Internet. Cloud computing enables companies to consume compute as a utility – similar to electricity or a telephone service – rather than building and maintaining computing infrastructures.”
Cloud Services: Different for Consumers and Businesses
When talking about the cloud, it’s possible to get a little confused because consumers and businesses use the cloud in a completely different way. Consumers use the cloud on a regular basis as part of their regular computing work. When a consumer, for example, reads their email on gmail, they are using the cloud.
It’s important to understand exactly how the cloud that businesses use is completely different:
“There is an entirely different ‘cloud’ when it comes to business,” says PC Mag.” Some businesses choose to implement Software-as-a-Service (SaaS), where the business subscribes to an application it accesses over the Internet. (Think Salesforce.com.) There’s also Platform-as-a-Service (PaaS), where a business can create its own custom applications for use by all in the company. And don’t forget the mighty Infrastructure-as-a-Service (IaaS), where players like Amazon, Google, and Rackspace provide a backbone that can be “rented out” by other companies. (Think Netflix providing services to you because it’s a customer of the cloud-services at Amazon.)”
3 Models of Cloud Services for Businesses
While many models of cloud services benefit business users, the three most popular ones are Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS)
It is through the provision of these three services that a cloud service provider makes good on their promise to make businesses more efficient.
1. Software as a Service (SaaS)
Software as a Service (SaaS) is used by businesses that want to consume software services. Cloud providers manage applications, runtime, middleware, operating systems, virtualization, servers, storage, and networking for their clients.
2. Platform as a Service (PaaS)
Platform as a Service (PaaS) is used by businesses that want to build applications. Cloud providers manage runtime, middleware, operating systems, virtualization, servers, storage, and networking for their clients. Meanwhile clients manage their own applications and runtime.
3. Infrastructure as a Service (IaaS)
Infrastructure as a Service (IaaS) is used by businesses that want to migrate computer functionality. Cloud providers manage, virtualization, servers, storage, and networking for their clients. Meanwhile clients manage their own applications, runtime, middleware, and operating systems.
Economies of Scale
One of the best ways to appreciate how cloud computing can make a business more efficient is by looking at efficiency as a consequence of a direct application of economies of scale. The concept of economies of scale arises from microeconomics, and it means that there is an inverse relationship between quantity and cost per unit. This happens because costs are diluted as they are shared over a larger number of units.
Economies of scale are deployed through cloud services.
5 Ways Businesses Benefit From the Cloud
Every year, an increasing number of businesses dismantle their legacy software solutions and head for the clouds. There are five reasons for this emerging business trend:
1. Cloud computing offers better insight and visibility on how a business is doing.
In leading businesses, 54% of use analytics to get insights from their big data, 59% use the cloud to seamlessly share data across apps, and 59% intend to use the cloud to get access to big data that is emerging and that will affect future industry trends.
2. Cloud computing makes it easy to collaborate.
Work can be accessed from multiple devices, and this work can be accessed from anywhere. The result is that cross-functional collaboration is easier. While 58% of cloud users collaborate across the organization and ecosystem, 59% improve business integration between development and operations.
3. Cloud computing can support a variety of business needs.
Internet B2B companies that have migrated to the cloud include 18% of messaging businesses, 15% of data storage businesses, and 13% of businesses selling office and productivity software.
4. Cloud computing allows for rapid innovation.
Market leaders use cloud computing for development of new products and services, with 52% using cloud-based resources to invent entirely new business or services while 24% use these resources to improve their current line of products and services.
5. Cloud computing now a proven model.
Cloud computing has passed through its growing pains and has proven to improve business efficiency, with 23% of businesses reporting they saw a reduction in costs, 55% reporting that they saw an increase in efficiency, and 49% reporting they saw an improvement in employee mobility.
Cloud computing improves business efficiency because it offers a business, worldwide access to company data, more storage capacity, easy set up, automatic updates, and reduced costs.