Benefits of Cloud Computing

Cloud computing, a term unknown to most 10 years ago, is quickly transforming the way we do business today. In the past, companies stored most of their digital information on large server farms that were most likely physically present in the businesses office. Thanks to new technology and the wide availability of high-speed broadband access, that’s no longer necessary.

Cloud computing, to those who aren’t familiar, is when digital files or information are stored on a remote server in another centralized location. Oftentimes, these servers are managed by an outside company (Amazon and Rackspace, for instance). Users can then access their information via an Internet connection, as if the files were stored locally on their own machine, eliminating the need for on-site, or even on-machine, storage.

Cloud computing is growing fast. By the end of 2013, it’s estimated that cloud computing will be a $131 billion dollar global market. According to the Enterprise CIO Forum, at least 80% of CIO’s get some of their current IT infrastructure through a cloud service.

Companies like Amazon, Rackspace, Google and Microsoft are offering cloud services for corporations big and small, and offering them significant cost savings in the process. According to one survey conducted by Rackspace, companies report on average a 23% cost reduction thanks to cloud computing. Even local, state and the federal government are getting in on the action. It’s estimated that 27% of local and state governments have moved to the cloud. And the federal government has long been a proponent of cloud services, with many agencies, departments and cabinets utilizing these cloud services.

Average consumers are even utilizing cloud services, as several startups and consumer facing companies begin offering these services to customers. Apple has their iCloud service, which allows you to store your photos, music and movies; Microsoft has Office 365, which allows consumers to access their Office Suite and related documents from anywhere; and startups like Dropbox offer consumers a way to sync all of their documents across multiple devices and computers, allowing you to work from anywhere.

These new consumer facing cloud services have helped facilitate the rise of mobile computing, with over 327 million mobile phones in the US alone, allowing consumers access to a wealth of data without needing the storage on their own local device. This reliance on mobile computing has been a boon for the economy and job creation. This in turn gives way for more mobile commerce to take place, with companies like Square, Stripe and Braintree making it easier to process mobile payments. Square is currently valued at around $3.2 billion, while Braintree was just recently purchased by Payal for $800 million.

New services like cloud computing allow us to become more productive, and also saves businesses thousands of dollars in IT costs. Fifteen years ago, a high-tech startup may have needed millions of dollars worth of equipment and infrastructure and an entire room to house the servers and other equipment needed. It would also need the manpower to make it all work. Now, startups can launch with relatively little capital by utilizing the cheap alternatives (like the cloud) available to them. This has lowered barriers to entry, making it easier than ever for an entrepreneur with a great idea able to launch his product or service. This in turn benefits consumers, giving them more options, better services, more innovative products—along with lower costs for all of them.

Zack Christenson writes on digital tech issues for the American Consumer Institute Center for Citizen Research

FacebooktwitterredditlinkedinFacebooktwitterredditlinkedin