The 6 advantages of Cloud Computing

Discover how companies leverage the cloud for their digital transformation

Cloud computing is the on-demand delivery of computing power, database storage, applications, and other IT resources with a usage-based pricing system (pay as you go).

In this new market, major IT players leverage their economies of scale, operational expertise, and geographic dispersion to offer all layers of enterprise computing (infrastructure, platform, and applications) as a service (IaaS, PaaS, and SaaS). Thus, the end company only has to pay a monthly fee and, with a couple of clicks, access the storage and computing capabilities that in the past required significant investments.

It is therefore a revolutionary technology, a true business catalyst that breaks down old barriers to entry for companies in all kinds of markets. Whether for entrepreneurs looking to launch their startup with minimal costs under lean startup principles, or for companies pursuing efficient big data analysis for better decision-making: more and more companies are benefiting from the advantages of cloud computing, and it is already projected that by 2022, 40% of IT core spending will be cloud-related. Below, we explain the most relevant advantages of the cloud.

Cost

This is the most well-known advantage and the first one that companies usually think of when talking about the cloud. The cloud illustrates the concept of economies of scale well: large digital service providers (such as Amazon, Google, or Microsoft) need to deploy large physical infrastructures to support their own applications. Their data centers are sized to respond to peak loads, presenting an excess of capacity — both processing and storage — that they market to third parties.

The cost reduction achieved by the cloud can be spectacular, and at SEIDOR we have achieved savings of over 80%.

CapEx to OpEx

IT professionals have two options when it comes to purchasing new equipment and technology: they can make the purchase as a capital expenditure (CapEx) or as an operating expense (OpEx). For many IT managers, the latter option is desirable: first, **getting approval for OpEx spending may be easier**, and also **eliminating a large initial investment can free up budget for other IT projects**.

Previously, building an in-house data center had a significant impact on both the balance sheet and income statement of companies. In the early days of the digital era, 40 years ago, large companies embarked on setting up costly data centers. **Companies had to estimate the necessary capacity** in the long term, and often ended up over-sizing the equipment. With the cloud, however, companies have the option to **pay only for what they need, when they need it**.

With cloud computing, a large service provider takes on the costs of maintaining and updating the data center. In this way, **companies can simply include the predictable costs of these services** in their overall operating budget, instead of having to raise funds every few years to upgrade their hardware, in addition to paying rent and electricity for the premises, and hiring specialized personnel for maintenance. **This "pay-as-you-go" option of the cloud is particularly attractive for small and medium-sized enterprises**, which often lack the resources to maintain in-house hardware. But the magnitude of this revolution is so great that **even large companies** that made costly investments in data centers are **now changing their strategy**.

Scalability

As we have seen, previously making a decision regarding resource capacity before implementing an application required a detailed analysis to avoid either oversizing resources or limiting the potential of our application with insufficient capacity. With cloud computing, these problems disappear. We can start with an initial sizing, and later increase or decrease capacity with a few clicks.

Furthermore, with the new cloud-native paradigm, we can ensure that all components of our application (computing, storage, database, etc.) are sized and scaled independently. Under the cloud-native paradigm, the application architecture is designed to take full advantage of the services that the cloud offers, at the lowest possible cost. In short, it is not enough to migrate old applications to cloud servers (IaaS). The goal is to redesign applications to make them cloud-native and take advantage of the flexibility and lower cost of PaaS services.

In this sense, one of the most interesting and innovative PaaS services is serverless computing. Serverless computing services allow loading code in the form of functions, and the platform executes those functions so that we do not have to worry about supplying instances in the cloud, configuring networks, or allocating sufficient storage.

Reliability

In on-premise systems, downtime used to be accepted as normal and preparing applications and servers for fault tolerance was a complex task. Now, with modern cloud-native approaches combined with a microservices architecture and dockers in the cloud, we can prepare applications to be fault-tolerant, with built-in automatic recovery capability.

With this type of designs, we can easily isolate the impact of an incident in case of failure so that it does not affect the entire application. Therefore, it is convenient for us to move from using monolithic servers and applications to using native cloud microservices, thanks to which we will achieve a higher uptime.

Speed

In a cloud computing environment, the availability of new resources is always just a click away. This means that we **reduce the time it takes for these resources to be available to developers from weeks to a matter of minutes**.

Furthermore, a modern and cloud-native application is **compatible with DevOps processes and methodology**, allowing for an **improvement in time to market** thanks to the automation of the application delivery process like never before.

In fact, **time to market has become the key differentiator among the most successful organizations in any sector**. The faster you can create and deliver value to your customers, the more likely the organization is to succeed. DevOps involves automating the entire software delivery process. And **the cloud provides us with services that help us practice DevOps: services that simplify provisioning and managing infrastructure, that deploy application code, that automate deployment processes, and that monitor application and infrastructure performance**.

Cultural Change towards Innovation

This is a particularly interesting feature of the cloud, probably the most revolutionary alongside the removal of entry barriers for small businesses. The combination of speed in obtaining resources, and their low cost, results in organizations experiencing a radical increase in agility for testing and developing applications. The aversion to error decreases, while faster and more numerous testing is encouraged. Ultimately, this has a very positive impact on organizations, making them more open to change and promoting constant innovation.

Organizations embrace the principles of agile methodology and incorporate them into their culture: to succeed, we must be open to failure. The idea is to learn from our mistakes as we modify and redo our code. With the cloud, developers will freely experiment as they try to achieve desired results, provisioning minimal cloud services to test their concept. They can also quickly abandon lines of work that do not yield desired results, shutting down cloud services and stopping payment for them.

This "fail fast, succeed sooner" mentality, applied in an iterative process and enhanced by the use of the cloud, allows development teams to learn along the way, receiving quick feedback on their ideas, creating increasingly better products and more spectacular experiences for the end user.