Cloud Computing for Business

Businesses cannot afford to ignore the importance of Cloud Computing. It has become the gateway to obtaining competitive advantage since the technology increases productivity. This chapter takes a look at the benefits of Cloud Computing to businesses, the risks associated with the technology, cost factors, and how it helps with business continuity. Avoiding capital expenditures and outsourcing are also discussed.

Benefits to Business

Cloud Computing has a number of benefits to businesses. These include:

  • Competitive advantage: Deploying applications that are crucial to the success of your organization happens almost instantly, allowing you to get products to the market faster than competitors. Such a competitive advantage goes a long way in helping the business achieve higher sales, hence greater profits.
  • Speedy performance: Cloud providers are under the pressure of updating their technology so that it is in line with customer demands, which helps them remain competitive. Therefore, businesses are provided with speedy performing technologies like faster SSD drives and powerful CPUs. Similarly, load balancing is also used in maximizing capacity utilization. In so doing, whenever the servers are busy with a particular task, the load can be spread out so that there is no server which faces performance issues.
  • Increased security: Businesses operating in the information age need better security due to the fact that hacking and data theft can easily render them redundant. Cloud providers abide by a series of data protection requirements which are essential in guaranteeing that business data would be kept safe. They put in place encryption mechanisms that control access to data as well as intrusion prevention systems that block the in-flow of viruses. The management can therefore focus on other important aspects of the business without worrying about threats to the organization’s data.
  • Flexible working: Cloud Computing provides employees with great flexibility with regard to how they work. Given that it is Internet based, employees can access organizational files remotely, allowing them to work from the comfort of their homes. Therefore, employees enjoy some of the most flexible working conditions.
  • Saves on costs of setting up IT department: Businesses no longer require putting in place a sophisticated IT department for it to take advantage of the many benefits that Cloud Computing has to offer. Only basic knowledge is required for to have a successful deployment of Cloud solution in the business. The organization does not have to install on-site IT infrastructure and go through the pains that come with of maintaining it. All these are simply leased via the Cloud provider. Thus, most of the resources which would have been spent in the IT department are allocated to other sectors, thus expanding the business potentials to make more gains.

Risks of Cloud Computing

As we celebrate Cloud Computing as one of the most useful technologies for business, we cannot afford to ignore the fact that it has its own risks. The following are some of the risks linked to cloud computing:

  • Unauthorized access to customer data: In most cases, such networks are haphazardly created and are easy to break into(Calyptix, 2016). Criminals may come up with an elaborate plan which can destroy small business networks. When they gain access, they could steal key data that facilitates business operations, rendering the organization unable to operate. Furthermore, Cloud services normally aggregate data from many other businesses. When the small business networks are hacked, they may act as a pathway to stealing data from large organizations. The use of Cloud service also increases the risk of government intrusion.
  • Legal risks: Most industries have strict laws regulating the use of customer data. These industries include: banking, healthcare, government, and any firm that uses credit cards as a means of payment. There are a wide range of bodies that have been put in place to check the manner in which such industries make use of data. A slight deviation from the regulation may result to penalties, which could be in the form of fines or complete closure of the business. Cloud Computing possess the risk of not being compliant to the legal requirements(Coles, 2018).
  • Risks associated with lack of control: When data is uploaded to the Cloud, one essentially gives the provider total control of the data in question. Cloud services are based on a subscription basis. What would happen to your data if you can no longer pay for the service? There is no direct answer for this question(Coles, 2018).

Cost Factors in Cloud Computing

As the business selects a Cloud provider, it must be aware to take into consideration the cost factor. The economics of Cloud solutions is completely different from that of traditional data storages given that it offers higher resilience and flexibility (Palian, 2017).

Once you are fully convinced that you need Cloud Computing to meet various business problems, the remaining issue is whether to go with IaaS, SaaS, or PaaS. Each has different price quotes. Having an understanding of the manner in which the prices are set helps you make the best decision.

The three cost factors in Cloud Computing are: compute power, storage space, and network.

  • Compute power: Different organizations have various needs regarding CPU. The cost of CPU is calculated by most providers based on the cost per gigabyte of RAM. This calculation takes into consideration two elements, hardware operation and hardware acquisition.
  • Storage: Storage costs are calculated as in compute costs. The provider determines the costs involved in operating storage hardware and also acquisition of new hardware for storage needs.
  • Network: When calculating the cost to be charged, Cloud providers perform an evaluation of how much money would be involved in the maintenance of the network. Labor costs, network hardware, and network infrastructure maintenance costs are calculated.

Avoiding Capital Expenditures

Moving your business to the Cloud goes a long way in helping avoid capital expenditures. A study done by Gartner established that businesses which continuously get rid of in-house infrastructure, which consists of software and hardware, were able to save greatly on capital expenditures (Gartner, 2017). Many organizations have actually learned about this trick, and are continuously adopting the service-based model rather than buying the whole IT infrastructure and going through tedious installation processes. Adopting Cloud solution is the way to go in an era where reducing business expenses help you have a competitive advantage (Bit Software, 2012).

Cloud-based solutions have been designed with the goal of making sure that capital expenditures are minimized. Even firms which are known to have taken the lead in offering in-house architectures acknowledge that this is the future. Microsoft has for more than two decades taken the lead in providing hardware and software to be used within organizations. Its involvement in Cloud solutions is a string statement to businesses that they cannot afford to ignore this new technology (ESDS, 2016).

Among the factors influencing many organizations to take up Cloud Computing is the promise of being able to avoid capital expenditure. Rather than bulking up from the beginning, obtaining applications through the service model is an effective way for businesses to pay per use. Through Cloud Computing, only required assets are rented, thus expenditure is shifted to operations instead of capital.

  • Save on taxes – When you reduce the upfront costs, the business goes a long way in cutting down on tax requirements. Cloud-based assets are paid for on a monthly basis as opposed to a single large purchase which would have made taxes to increase.
  • Reduction of hardware costs –When you want to install traditional on-site premises, the business would have to incur additional hardware expenses like buying or renting servers, as well as establishing a secure room for the server. These are heavy upfront costs that may limit the business from progressing rapidly. When it comes to Cloud Computing, such hardware costs are kept at bay. In fact, the regular small payments to the Cloud provider are regarded as normal business expenses.
  • Pay for what is needed – Most businesses use a lot of money in establishing on-premises infrastructures only to fail to use them later on. With Cloud Computing, such unnecessary expenses are avoided. You only pay for the resource that is required.

Business Continuity and Disaster Recovery

The business can incur emergencies at any time. Despite these emergencies, you want to assure that business operations go on uninterrupted. For quite a long time, small and mid-sized businesses have had it rough proceeding with operations after an emergency. The emergence of Cloud Computing has changed all of that. The Cloud plays a powerful role in ensuring that business continuity is guaranteed and that you recover from a disaster (Crocetti & Rouse, 2019).

Business continuity and disaster recovery may be related, but they are two different concepts. However, they do overlap, especially when viewed from the perspective of Cloud Computing. With regard to business continuity, the Cloud ensures that vital operations go on, long after the disaster has struck. Thanks to Cloud Computing, employees do not necessarily have to be at the workplace to meet their daily duties. An executive manager can schedule meetings from Singapore while his office is in Canada. Say for example a string storm interferes with their ability to travel back to the office; they would still be able to meet client’s demands from the comfort of their hotel on a business trip.

Disaster recovery entails being able to come out of a disaster with a lot of vigor and strength as it were before the disaster happens. The operation of businesses in modern society is influenced by data. When disaster happens, the first major element that is likely to be lost and negatively impact the business is the data. However, Cloud Computing involves storage of data offsite. Therefore, in the event of a disaster, you would still be able to access your data and key business applications easily.

As cyber threats become a reality, business continuity and disaster recovery have become a major concern to most organizations. Cloud Computing makes it possible to achieve both (Crocetti & Rouse, 2019).


Out-sourcing has for a long time been considered as the most viable option to overcome IT-related complexities. Cloud Computing appears to offer the same solution. But there is a slight difference – its solution is far much better than one offered by out-sourcing. There are a number of factors that accounts for this. To begin with, the Cloud is cost friendly. The expenses involved in subscribing to IaaS, SaaS, and PaaS are far much lower than what you would have to pay if you were to bring in external consultants.

Even though the maturity of Cloud solutions still lags behind out-sourcing, it is more radical. The fact that it includes automation makes it the go-to option when deciding it against out-sourcing. Cloud computing has thus become the kingpin for the future of any information technology needs of any organization.

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