Cloud Computing - Why Businesses Invest?

Showing Vast Networks of Virtual Machines and Servers
Image's Source:  Pixabay

Have you ever thought that why businesses and various institutions like to invest money in cloud computing? Yes, there is a simple answer: to gain benefits from economies of large scale.

Under this powerful mechanism, enterprises and institutions rent out virtual services from cloud service providers for accessing their various facilities such as virtual machines, software, hardware, big servers, huge data storage capacity, faster RAM, quick processing in real-time, zero incidences of shutdown, high powered data centers, uninterrupted online cloud services, and more importantly, they get continuous security, system upgradation, and maintenance checks which all combining keeps businesses tension free.

Cloud service providers charge nominal fee on the basis of 'pay as you go model' and they offer options either subscription based or consumption based for the companies and institutions. 

To reduce considerable operating business costs, increase efficiency level, enhance working speed, maintain 24/7 seamless operations, eliminate risks, make themselves free from IT hassles, and maximize revenue streams, companies lease out cloud computing hosting services from big cloud players such as Amazon, Microsoft, Google, IBM, Alibaba, Oracle, Tecent Cloud, OVHcloud, and this list goes on.

Importance of Cloud Computing


Cloud computing service providers give access their virtual resources to devices, computers, browsers, and cloud applications-run dashboard of the clients that are run through ample bandwidth capacity and high speed of internet.

The importance of cloud service providers is increasing in corporate sectors because they help businesses in reducing operational costs, improving efficiency, providing security of data, ensuring storage of big databases, mobility of work, keeping zero latency rate, and facilitating in accessing cloud applications on 24/7 basis.

The cloud hosting services maintain pool of servers, vast networks of data centers, software, hardware, virtual machines, and massive cloud data storage. They carry on nonstop security in different areas like virtual databases, system updating, and ensure 24/7 seamless cloud accessibility, software, hardware, virtual machines, and connectivity.

To maintain and invest in IT infrastructure on-site, businesses and institutions periodically make capital expenditures in installation of new software, buying expensive hardware, constructing racks to accommodate big servers, investing funds in upgradation of systems, and employing IT workers to look after their set ups.

When companies decide to rent out above-mentioned business requirements from cloud service provider, so, as a positive result, companies save considerable monetary budgets and this strategy helps them to reduce operating costs, increase level of efficiency, maximize revenues, and channelize saved funds in other productive areas of the business.

Benefits for Small Businesses


The platform of cloud computing is specifically useful for small and medium sized businesses because they face monetary constraints, incur higher level of overhead costs, encounter tough competition from their rivals, allocate less budgets for promotion campaigns and aggressive marketing, and more notably, they experience low penetration ratio for their products and services in the markets at initial stages.

To reduce substantial operating costs, it is quite beneficial for small businesses to connect their operations from the vibrant virtualization technology that is called cloud computing.

Small companies need time to establish their products, services, offerings, and brand image in the markets on local and international scale, so, to curtail considerable operational costs, it becomes essential for them to get efficient services of cloud provider.

The anticipated savings of small businesses in different overheads include buying costly software, hardware, system upgradations, servers, maintenance, security, electricity, rent, and arrangement of spacious space for separate IT operations, and additional IT workers.

You can understand that small sized businesses after saving in the above cited overheads, are well-positioned to allocate saved funds on their other strategic business expansion programs.

Reduction in Operating Costs


To ensure profitability, maintain consistent growth, and build lasting corporate reputation, all businesses and institutions try to minimize costs of doing business, maximize revenue streams, increase sales, enhance corporate brand image, retain loyalty of customers, raise promotional activities, offer quality products, services, and special offerings.

To maintain and operate their own IT infrastructure, businesses and institutions allocate massive monetary budgets in acquiring expensive physical working space, hardware, software, servers, routers, extensive networking, system upgradations, security, regular maintenance, and employing multiple IT staff members, so, transferring these operations to a cloud hosting organization relieves businesses from all operational worries.

Enterprises and institutions make wise money investments in renting out cloud computing, so, as a good outcome, they save lots of money which becomes available for the allocation on other important business expansion programs.

Building Brand Image


Cloud hosting service helps in reducing costs of doing business and accumulating funds in the form of corporate savings, so, as a result, businesses increase monetary allocation in the marketing and promotional campaigns which help them to increase sales, build brand image, maximize revenues, and expand outreach for target audience on global basis.

Rightsizing in Staff


Through deployment of cloud computing in the setups, businesses and institutions curtail costs of doing business, save considerable money, spend less amount on maintenance, buying software, hardware, electricity, and more significantly, companies need to hire lower number of IT staff for running and maintaining the operations.

Super Speed


Computers, electronic devices, websites, web applications, Internet of Things, core business activities, and small IT center of businesses and other institutions are connected through internet taking uninterrupted support from strong platform of cloud computing which helps them to process data on much faster rate with zero latency because cloud service providers ensure seamless speed with ample bandwidth capacity for which they charge nominal fee from the companies.

You see that cloud hosting services maintain their widespread established Regions, Availability Zones, robust platform of software, hardware, huge data storage capacity, chain of large data centers, and install relevant software to boost up virtualization at user-end, so, providing companies faster speed for working in real-time.

Picture Showing Vast Networks of Cloud Computing
Image's Source:  Pixabay

Security


Companies and institutions do not need to worry about their saved data on cloud because cloud service providers continuously monitor, maintain, check, duplicate, and update their systems on 24/7 basis. 

Businesses can upload and access their saved data on cloud from any part of the world on 24/7 basis with complete security.

By renting out contract with cloud service providers, companies and institutions save enormous amount of funds in the form of maintenance costs on security of IT networks.

Scaling Up Business Operations


You know that leasing system of cloud computing is based on 'pay as you go' basis, so, it means that companies and institutions will pay nominal fee as per their actual virtual consumption.

In case, companies need to expand their business size, then, as a result, they will need further virtual storage and operational capacity, so, they can easily manage to amend their agreed plans with cloud service provider for increasing their storage capacity within few hours.

Drawbacks


Besides lots of advantages, there are few drawbacks in the mechanism of cloud hosting, like important data of businesses are stored up on data centers of cloud service providers, in case, internet facility is disconnected from internet service provider(s) or massive disruptions in power grids might happen in Regions and their associated Availability Zones, then companies and institutions cannot access their data.

Furthermore, all sensitive and confidential data of companies are stored on cloud, so, in case of any data breach or data thefts, then affected companies and institutions may face reputational damage and huge financial losses.

Types of Clouds


There are three types of clouds which are used according to the specific requirements of companies and other institutions. 

  • Public Cloud
  • Private Cloud
  • Hybrid Cloud

    • According to the research of Hosting Tribunal, public cloud service market is expected to touch around US$ 623.3 billion by 2023 on international level.

    Types of Cloud Services


    To reduce capital and other expenditures, companies lease following types of cloud services which help them in using resources, servers, virtual machines, massive storage, networks, developing and testing web, mobile applications, and setting up infrastructures on cloud hosting providers, so, companies and institutions manage their 24/7 operational and technical functions with high efficiency.
    • Infrastructure as a Service (IaaS)
    • Platform as a Service (PaaS)
    • Software as a Service (SaaS)
    • Serverless
    Hope you have enjoyed this post! 😊

    Location: Karachi City, Sindh, Pakistan

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