Cloud computing has played an integral role for many businesses on their ever-expanding digitisation journeys over the past decade. To see how popular the technology remains in growing organisations, we only have to look to one of the industry’s biggest names, Oracle. In its most recent quarterly results, the firm exceeded expectations as demand for cloud services continued to rocket, says Adam Gaca, cloud operations business line manager at Future Processing – member of the SoDA network
At a time when businesses are facing an uphill battle against rampant inflation, the fallout of war in Ukraine and once-in-a-generation energy prices, how can cloud computing continue to help organisations become more efficient while reducing operational costs?
Upholding security
During the early days of cloud computing a time when a lot of mystery surrounded the new and exciting technology the idea of storing data ‘off-site’ did not appeal to many businesses. This fear has since withered away and it is now estimated that the average business stores 38% of its workflow in public cloud and 41% in private cloud. Companies are waking up to the benefits of moving data and workloads away from on-premise legacy systems, with security being one of the major pull factors driving the migration.
Moreover, cyberattacks continue to grow in frequency, with ransomware in particular seeing a consistent growth in popularity among hackers. Cloud has emerged in this time as a safer option for data security, especially when it comes to things like data backups, which are vital for ensuring business continuity. Given the average cost UK businesses have to pay when hit by a cyberattack is between £8,460 – £13,400, it makes financial sense to be prepared.
Cyberattacks can be inflicted upon any organisation, large or small. To use a recent real-world example, the UK’s largest employer, the NHS, is now facing weeks, if not months of disruption following a ransomware attack in early August 2022. The attack itself targeted an IT supplier of the NHS and successfully stole patient data, which is now being held for ransom.
This demonstrates the need for all organisations to take cybersecurity more seriously, especially given the interconnected nature of modern companies, where sensitive data might be shared with a range of suppliers and partners.
From a security standpoint at the very least, adopting cloud-based solutions across the business means the organisation is not only protecting its reputation, but its hard-earned capital as well.
Reducing hardware overheads
Businesses spend a lot of time and money on IT hardware. Every five years, a company typically has to refresh existing hardware with new and improved technology to be installed on-site. This usually involves incurring costs not only for purchasing the necessary equipment, but also for labour costs to overhaul existing hardware and downtime to get the new tech up and running. All of this adds further financial and time strain to a business, which few organisations will want to stomach at a time of such great economic uncertainty.
In contrast to the traditional approach, cloud requires minimal expense on physical IT hardware. This allows businesses to avoid the endless cycle of financial costs for the upkeep of on-site servers. Further, businesses can free up office space formerly reserved for housing physical infrastructure, and will spend less on utility bills as the high power consumption needed to keep servers running is handled by a cloud provider.
Recent research found that the cost-saving benefit of cloud computing was the most important factor when implementing the technology, with security improvements taking second place, followed by a more seamless technology experience for businesses. At a time when organisations are tightening their belts, it is clear to see why these savings are being held in high regard.
A vital cost-cutting measure
For businesses navigating these financially challenging times, cloud computing could also be a hugely effective cost-saving measure for the wider business beyond IT hardware spending. Making a choice to invest in cloud offerings, rather than opting to severely reduce or halt spending completely, can deliver a plethora of financial benefits in the long term.
When it comes to cloud projects, measuring ROI is essential and is an important factor in choosing the right cloud platform to migrate to. Research from Nucleus found that as early as 2012, ROI for cloud computing solutions was 1.7 times greater compared to on-premise solutions. Eliminating capital expenses in favour of operating expenses strengthened cash flow and downscaled personnel costs as IT staffing demands fell due to cloud migration. In 2020, Nucleus conducted similar research which found that average cloud computing ROI had widened to over four times greater than on-premise offerings.
The current economic outlook is a challenging one for business owners, but these ROI figures demonstrate that cloud computing could be a lifeline for organisations needing to cut costs.
One of the major challenges in this area is accurately quantifying and measuring ROI, as IT projects such as cloud migrations have unique characteristics whose success can be difficult to define. The good news is that recent research has shown that by implementing the right processes and assessing cloud projects in the right ways, businesses can now build up a highly accurate picture of how a migration has saved them money.
Generating greater value for the end user
Embracing digital transformation and making the most of cloud computing means businesses have to arm themselves with the most innovative solutions currently on offer. When technological problems are encountered, they are often directly linked to ageing IT infrastructure and hardware. Businesses who are reluctant to embrace the cloud are more likely to continue to feel the effects of IT outages and disruption, which makes life more difficult for both employees and customers who are impacted by them.
By adopting cloud, organisations can proactively eradicate these interruptions and many other age-old IT-related issues, leading to a more streamlined experience for both internal and external stakeholders. All of this means greater efficiency within the organisation, which ultimately translates into a better customer experience on the outside. When times are tough, both of these things are more crucial than ever.
The author is Adam Gaca, cloud operations business line manager at Future Processing
