(This post was originally published on July 16, 2012. We’ve updated it for accuracy and completeness.)
Today, people recognize two types of clouds. There’s the white puffy ones found in the sky. There’s also the cloud that we use every day to access different types of data. The latter seems to be all you hear about lately.
That’s because businesses are making the decision to move more and more of their processes to the cloud. In fact, Synergy Research Group reported that worldwide cloud computing market grew 21% to $110 billion in 2015.
We know that cloud computing is here to stay, but most of us aren’t sure exactly what it is and what the benefits are. This article will help answer those questions.
What is Cloud Computing?
To put it simply, cloud computing is how data is stored and accessed. The cloud itself is a network of servers. Each server has a different function. Cloud computing allows you to access the server data anywhere via an internet connection.
An easy example of cloud computing is Google’s Gmail. You sign in on any device through a web browser and access your emails (data) hosted by Google.
Types of Cloud Computing
Different cloud types can be broken down into two main categories: cloud location or the service being offered.
Cloud locations include:
- Public – infrastructure is not maintained by customer, but instead by cloud computing company that offers the service
- Private – used only by one customer or organization
- Hybrid – using both private and public cloud services
- Community Cloud – infrastructure is shared among organizations
The services that a cloud offers includes:
- Infrastructure as a Service (IaaS) – rent services from cloud providers such as storage space and servers
- Platform as a Service (PaaS) – rent the use of the servers and the system software to use them
- Software as a service (SaaS) – rent application software and databases while the cloud provider manages the infrastructure and the different platforms that the applications run on
Amazon Web Services and Microsoft Azure are IaaS examples. Google App Engine classifies as PaaS, while Microsoft 365 or Salesforce are examples of SaaS.
Understanding the basics of cloud computing helps you fully realize the benefits of operating in the cloud.
The Benefits and Advantages of Cloud Computing
Many businesses are moving to the cloud and for good reason. See some of the top benefits of cloud computing.
Reduction of Cost
The main benefit of cloud computing is that it leads to a significant reduction in costs. This reduction is from a decrease in operating and maintenance costs. You only pay for capacity when you need it.
Further, installing a server for you company can cost quite a bit of money, not to mention maintaining it and fixing it when it goes down. Instead, utilize the cloud and another company’s servers. This saves costs on hiring more IT staff and equipment.
Accessibility & Efficiency
Another benefit is the accessibility of the cloud. As long as you have an internet connection you can access your data from anywhere.
When on the cloud, employees, partners and clients can access and update information from any location. Those updates with software or platforms are automatic, or in real-time. Having the ability to access information and others so easily and quickly increases functionality and helps foster innovation. Employees have their data at their fingertips no matter where they are, either roaming around the store or working on the road.
Your data is safer as well. Since your data is stored in a secure data center instead of your server room, losing power does not affect the cloud. Many service providers maintain 99.99% uptime. Your data is always accessible via an internet connection.
Easy Software Updates
A significant advantage of cloud computing is the ease of updating the software. Cloud computing allows for frequent, undisruptive software updates. This ensures you have the best features of the software without interrupting your work time. Updates don’t require a lengthy installation of new software.
Even the Playing Field
Cloud computing allows smaller firms to compete with larger firms as huge investments in IT infrastructure and IT staff is minimized. Paying only for what you need allows you to focus on your core product/service and keep IT costs to a minimum.
With cloud computing, you can now increase the volume of your outputs without a corresponding increase in staff. Your cost per product or service offering decreases allowing you to produce more. Additionally, the need for purchasing more storage decreases so your company does not have to invest in expensive hardware or software programs.
Cloud Computing in a Multichannel Retail Environment
Finally, cloud computing in a multichannel retail environment can help your company simplify data integration between different systems from eCommerce, Point of Sale, Accounting, ERP and Inventory.
A cloud-based solution integrating these systems together enables companies to maximize the use of the systems they already own, improve data visibility, and streamline operations. With multiple channels, data from multiple locations becomes a hassle and manually entering data between systems becomes arduous and inefficient. Cloud computing allows companies to syndicate items faster, centralize order management and customer data, and synchronize inventory.
The end result is a more streamlined operation saving companies money, time and headaches.
Learn More about Cloud Computing
Check out these articles to keep learning more about cloud computing.