What Happens in “Cloud Land”

The use of cloud storage and computing service has spread rapidly because it offers flexibility and cost-effectiveness that companies will find difficult to replicate with an owned and operated datacenter.  The challenge of having spare capacity to support nimble innovation and yet control IT costs is a chronic tradeoff for most enterprises.  Cloud services let corporate IT executives meet that challenge.  In the process, American businesses make good strides in productivity.

A study of cloud computing in the EU concluded that it is especially helpful for small and medium businesses.  Using cloud computing would encourage the creation of a few hundred thousand new small to medium sized enterprises and make a significant contribution to economic growth. The use of cloud services allows small businesses to avoid the large upfront costs associated with creating an up-to-date IT infrastructure.  The cloud’s sophisticated assets allow them to compete with firms above their size.  The benefits have drawn many companies to make a serious commitment to cloud computing.  Revenues for cloud services in 2017 are expected to be $240 billion.

Cloud services are based on a foundation of current, standards-compliant equipment, networks and software.  The technical staff to maintain that environment and the spare infrastructure capacity to accommodate sudden growth in customer demands would cost more than most companies could afford.  Cloud providers offer customers almost any amount of storage with needed backups and cyber protections.  Because cloud operators spread their costs across many users on a charge for usage basis, their customers see charges that track with what their enterprise has used.  There is no longer the need for the costs of infrastructure that the enterprise owns but which sits idle or out-of-date.   

Cloud services will not eliminate the need for system designers and programmers, but the availability of “software as a service” will speed development time for applications and eliminate some common IT maintenance chores such as updated application versions and patches to system software.  Business cloud services are offered by Microsoft, Google, Amazon, VMWare, Apple, Salesforce, Oracle and others.

Large scale software such as SAP’s human capital management software is a cloud-based capability that “support[s] the needs of multi-generational, global, and contingent workforces… for onboarding, workforce scheduling, payroll, and more..

Salesforce is a cloud storage and computing company that offers a highly popular sales and customer relationship product.  Salesforce has been highly successful at innovating with tools that make a sales force more effective.   

Oracle’s NetSuite product offers “cloud-based accounting, enterprise resource planning, customer relationship management and other business software packages” to the “healthcare, wholesale distributing, manufacturing, nonprofits, and media” industries.

Consumer and small business cloud services are also available from Amazon, Microsoft, Apple, Google and dozens of other retailers.  Consumers generally take advantage of a free cloud storage offer (about 1 gigabyte) as a cyber-attack resistant way to back up files, pictures, and music on their personal devices.  Some consumers and small businesses will use the cloud-resident offerings such as Microsoft’s Office 365 suite (including Internet Explorer, Excel, Word, PowerPoint and SQL) or the equivalents from Google, Apple, or other UNIX-based operating systems.  

There are great advantages in cloud computing, but it may also magnify our problems when there are network failures or unexpected accidents that damage cloud datacenters.  On balance, it seems cloud services are an economic boon.

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