02 - Business Perspectives of Cloud Computing

With Cloud Computing becoming the trend and the new way to do business, organizations are opting for the cloud model to work. The main factor in favor of cloud computing is the reduced cost of infrastructure and applications. Added to that, the lower or no costs for support and maintenance is another important aspect promoting the acceptance of cloud computing.

Cloud Computing VS Outsourcing

Before the emergence and wide acceptance of cloud computing, organizations and businesses depended on service companies which offered the infrastructure, which would otherwise be very expensive to set up. These service companies, in this scenario, act as vendors to the other companies. The vendor companies set up the infrastructure and offer the services to different companies. But, with cloud being readily available at lesser cost now, more and more companies are opting for the new technology.

There is a fine line differentiating when to outsource and when to use cloud. Some of these factors are as follows:

  • Level of control – In traditional outsourcing, the companies have a better control on all layers of the infrastructure and application. Whereas, depending on the type of cloud implementation, the degree of control varies. The degree of control is usually very less in cloud. So the option is chosen depending on the level of control required over the infrastructure and applications
  • Security – Cloud is not as mature as outsourcing yet. So there is always a risk factor associated with the data accessed over the cloud. If companies have highly confidential data, outsourcing is the preferred model.
  • Managing the business – Even if services of the cloud or outsourcing is used, the companies need to maintain their systems and data in an internal cloud-like model. There must be seamless integration between the cloud or vendor and the internal environment. Cloud providers may not have a very clear understanding of the end business requirements and clients of the company as an outsourcing company understands. So, the more complex your business requirements, the better to depend on outsourcing, for the custom-tailored results.

Business Drivers

There are some business drivers which promote the acceptance and adoption of cloud. These are directly dependent on the business goals and customers. The key business drivers for the adoption of cloud are in fact called the benefits of the Cloud model itself.

  • The first factor driving businesses to opt the cloud model is the reduced IT costs itself.
  • Once on cloud, the business continuity is assured. Even if your system crashes or you lose data due to natural disasters, your data is safe on the cloud. You can use the backup so that your business is not impacted.
  • As your applications and software are on the cloud, you need not worry about the updates and upgrades. These are seamless and taken care by the cloud vendor.
  • The performance and scalability of the applications on the cloud are commendable.

Business Benefits & Limitations

Cloud computing is still in its infancy and is an emerging technology. Organizations and businesses are trying out and benefiting from the services of the cloud. However, there are certain limitations to this cloud computing model as well. Let’s do a comparison on the benefits and limitations of the cloud computing.



Reduced IT costs – This is the primary advantage of opting for a cloud model.

Security Threat – This is the primary risk of having data on the cloud. You have to depend on the vendor’s security applications. Your data might not be that secure when passed over the cloud, especially a public cloud.

Scalability and Performance – The performance and scalability of applications are considerable improved, when on the cloud, due to the constant maintenance and upgrades.

Technical Downtimes – Even a cloud would experience technical issues and downtimes. You would be helpless in these scenarios, as you would have to wait until the issue is resolved to access the services again.

Business Continuity – Business continuity is not impacted in the case of natural disasters or system problems. The data is backed up on the cloud.

Vendor Lock-in – Once you decide on a vendor and start using the services, changing a vendor would be the most difficult task. The effort to move the huge data across to a different vendor’s cloud would be a highly risky and time consuming process.

Quick deployment and Ease of Use – The application or software is already installed on the cloud. For the business, it is just a matter of accessing it.

Low degree of control – You would not have access to the different layers of the applications. For most of the applications, you would have access only on the top layer. So you would not have the option to customize heavily or even do basic troubleshooting at times as the services are being used by other end users as well.

Automatic updates and upgrades – The vendor takes care of the updates and upgrades required to the applications and software. Very often, these are seamlessly done without impacting business.

Prone to attacks – Being on the cloud, especially the public cloud, your data is always at the risk of being prone to attacks. You might have to have different service models to segregate the highly confidential data that must not be conveyed over the public cloud.

Unlimited Storage – Being on a cloud, the storage options are definitely more and advanced compared to the physical storage installations that would be done at an organization’s premises.

Uninterrupted Internet Connection – Unlike an internal application, the cloud services are from a third party and to access these, you would always require a high connectivity Internet connection. The performance of the applications are impacted if your Internet connection is slow.

Business Case

When you are deciding whether or not to adopt the cloud model for your business, the best approach to analyze the situation is by creating a Business Use Case for the Cloud Model. For this, you would require to collect data, do comparative analysis, create reports, and understand the technical details involved.

  • Understand the business requirement – Talk to all the customer facing and non-customer facing team heads, get a clearer picture of the business requirement and draw out the direct relation between the business requirement and business aspects involved.
  • Cost study – Create a comparative analysis report to understand the cost involved in using the services of the cloud compared to having infrastructure and services in-house.
  • Taking expert advice and professional help – Have sessions with Cloud advocates to understand the principles and technicalities of having your business on the cloud.
  • Study other relevant business use cases – Study the business cases of other similar businesses, who are on cloud as well as not on cloud.
  • Data security – Have professionals deployed to do a detailed study on the data security factors involved, if migrating to the cloud.
  • Migration effort – Create a detailed report of the manual as well as automatic requirements for the migration to cloud, if the business was already running with another vendor or in-house.
  • Choosing the right model – Understand the options of the different cloud deployment models and choose the model rightly suiting your requirements.

There are several business use cases available of the leading organizations, on the cloud adoption. Some of the major companies promoting cloud are Amazon and Google.

Today, when everything is being developed and marketed for the cloud, cloud is definitely the way for your business to go. But understanding your business and if cloud is the option for your is the biggest task.

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