The Value of Cloud Computing for Organizations.

What is Cloud Computing?

Simply put, cloud computing is the process of accessing computing services through the internet. Such services include databases, storage, servers, software, business intelligence, etc. The provision of these services via the internet; also called the cloud, provides flexibility for organizations, increased innovation, and economies of scale. This is opposed to spending heavily on hardware storage, software, and databases. Now, rather than buy these information technologies, organizations can rely on a cloud service provider to handle the heavy lifting.

Types of Cloud Computing

  1. Public Cloud

This is also known as multi-tenant architecture as the infrastructure is shared with multiple users. Public cloud providers allow users to access large amounts of computing power over the internet. The service provider oversees the entire computing infrastructure which is at the provider’s location so users do not have to maintain their own IT. The benefit of this is that it accommodates rapid scaling and increasing computing needs. Public clouds are often used for less sensitive applications.

2. Private Cloud

A private cloud is used exclusively by one organization and offers the highest level of security and control. Although organizations that use the private cloud benefit from some of the advantages of the public cloud, they maintain utmost control over their data- how and where it is stored and services. However, the extra security and control come at the cost of scaling at par with the public cloud.

3. Hybrid cloud

Just as the name implies, this is a combination of both public and private clouds. Hybrid servers give users more control and security even while they benefit from using a cloud service provider.

4. Multi-Cloud

This is the use of multiple cloud computing and storage devices in a single architecture. Here, organizations spread the bulk of their computing needs across a number of cloud service providers. This approach is based on reducing the high costs that come with relying on just one vendor and finding the best mix of technologies across the industry to increase flexibility.

Value of Cloud Computing for Organizations.

Figure 1: Cloud computing

The development of cloud technology continues to highlight the limitations of traditional IT infrastructure even more year on year. Businesses struggle to adapt to marketplace changes and new trends as their technological environments are inefficient at sensing and responding to them. Matthias Popiolek, a digital advisor and cloud expert suggests three categories that showcase the benefits of cloud computing for businesses:

  1. Enabling: This is the popular application of cloud computing to support other aspects of the business ecosystem. By making it faster, more efficient, and more flexible.
  2. Improved Collaboration: The cloud makes for smooth collaboration processes even with global teams. People can share and grant access to the same files and even view live changes while they happen. This way work efficiency is improved and time is saved in the process. It removes the limits of communication experienced with traditional IT models.
  3. Scalability and Performance: The structure of cloud services makes it so that it accommodates the growing business IT requirements such as storage space and bandwidth. Cloud servers are deployed automatically to assist businesses as they scale up and down to ensure optimum performance at all times. It improves speed and minimizes downtime.
  4. Automatic Software Updates: Many cloud service providers offer regular system updates to ensure IT requirements are consistently met. They ensure round-the-clock maintenance of cloud servers — including security updates — freeing up time and money that businesses spend doing this in-house. Research shows that in 2010, businesses in the UK spent 18 working days per month managing their on-site IT security.
  5. Relieving: Cloud computing makes it so businesses can divert resources into other priorities and focus more on other aspects of the business, which improves the business’ value.
  6. Business Continuity: Cloud computing ensures that data within the business can be kept safe and recovered in the case of incidents like fire outbreak, hacking, earthquake, and theft. Businesses need not worry about the amount of storage backing up data physically would require or the cost of purchasing disaster proof storage. The cloud itself is designed in such a way that data stored in it is mirrored across the servers, so that if one fails, data is instantly backed up.
  7. Cost Efficiency: A popular and arguably the most significant advantage of cloud computing is the IT operational cost savings. Using remote servers removes the need for in-house storage equipment and application requirements, as well as overhead costs such as software updates, management and data storage. Cloud-based services are also much cheaper to use, as they are typically deployed on a pay-per-use basis.
  8. Creating: The cloud provides a foundation for innovation by combining existing building blocks in varying ways to realize cloud business benefits. It provides the vast possibility of things like IoT, AI and ML, analytics, etc.
  9. Automatic Software Integration: Cloud computing allows for software integration which occurs automatically in the cloud. This automates the process of application integration. Hence, software applications and services can be quickly and easily customized. This increases optimisation as businesses can mix and match what works for them..
  10. New business Models: Businesses can now incorporate business innovation initiatives through readily available cloud services. Incorporating these services can result in new and innovative business models, generating new value propositions and resulting in new revenue streams. There are organizations that introduce entirely new business models and value propositions solely using cloud services.


Making a case to move an organization’s IT infrastructure to the cloud isn’t always a walk in the park as there are various factors to take into consideration. A starting approach is to figure out the actual cost of the current infrastructure (data centers, CPU, physical hardware, applications, etc), This is a starting guideline. Next, it is important to figure out what you’d like to do with existing applications, either rebuild, re-host or discard them and get a new SaaS package. Finally, the organization should factor in the human resource costs amongst other things such as the benefits of using cloud to the organizations.



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