We live in a world that still reels under the COVID-19 pandemic. While Digital Transformation was important to organizations of any size before, today it has become crucial to their survival. In this context, this article will guide you in understanding how technology can help you set up a remote working process for your employees, make your organization more agile and flexible, and ultimately make it more cost-efficient.

Introduction

With technological advancements, the rising power of computing capabilities, and the availability of broadband internet, Cloud computing can help businesses improve their internal processes, get better results and, ultimately, increase the bottom line. Cloud computing refers to an interaction between one or multiple devices and a common Cloud storage space that is connected through a network. The roots of this concept can be traced to 60 years ago, when the earliest prediction was made:

“Computing may someday be organized as a public utility, just as the telephone system is a public utility”
— Professor John McCarthy

It took a very long time for this concept to become popular, but in 2006, when Amazon re-introduced Amazon Web Services (AWS) and presented Elastic Compute Cloud, Cloud Computing really took off. Now, over 90% of enterprises use Cloud service models, and according to the study by Fact and Factors Research, the global Cloud Computing Market has already exceeded the USD 300 billion mark! What does this mean for businesses in 2021? How can organizations leverage Cloud technology for maximal advantage? How can organizations benefit from choosing the right Cloud service model and Cloud deployment model? What do organizations need to do to calculate the cost of Cloud migration for them? We will answer these questions and many more in this article and share some real-world experience of SPD Group!

What is Cloud infrastructure?

For businesses in almost any industry, this revolutionary trend opened the possibility to choose between providers such as Amazon Web Services, Microsoft Azure, or Google Cloud and get a flexible Cloud infrastructure with modern computing capabilities, networking speed, and storage space. This means that organizations don’t need to buy and maintain the latest hardware devices and maintain their own data center in-house anymore—instead, they can spend their resources on other important strategic goals.
The exact definition of Cloud infrastructure may differ according to different sources, but we can say that it has, but not limited to, a combination of several main components:

  • Servers
  • Software
  • Network devices
  • Storage resources

These components are crucial to building applications that can be accessed via the Cloud. There are three parts of the Cloud infrastructure that interact with each other and create the Cloud service: Computing, Networking, and Storage.

Cloud Computing Advantages and Disadvantages

Top 10 Business Benefits of Cloud Computing Services

No need for hardware maintenance on your part

If you don’t have any actual hardware on-site, you don’t need to maintain or upgrade it—as simple as that. Every 3–5 years, hardware systems need to be upgraded or replaced, and this could be an extremely long and painful process, especially for large organizations. So, using cloud computing means that you can spend your time and money resources on something else— the cloud provider will take care of this problem for you!

Fast and frequent updates

While a standard CRM tool for on-premise usage gets updated yearly, most Cloud computing platforms offer updates regularly—sometimes even weekly. If you stick to the old school approach, you will get more downtime and IT stress in general when connected to software updates.

Cost-effectiveness

IT services based on Cloud are way cheaper than other alternatives. Once again, without the need to have much hardware equipment to store and use data on-site, the expenses on maintenance become non-existent. Additionally, it doesn’t really matter how powerful the equipment that your employees use actually is. You can access a service in the Cloud from a personal cell phone or a cheap laptop just as easily as from the latest high-end personal computers. Cloud computing helps you cut off expenses on the devices that your organization use.

Great flexibility and scalability

If you have your own hardware, you are limited with its capabilities. If you need to scale fast, you can run into the problem of having to buy more equipment quickly, or when there is more equipment than actually required, you will simply waste your capacities. Using services in the Cloud, you would be able to scale up and down fast without any additional hassle.

Uninterrupted data collection and storage

Cloud technology will offer you the cheapest way to collect and store data as well as create multiple backups of it. This will lead to uninterrupted internal processes with as fast and secure a disaster recovery process as possible.

Increased productivity

Your employees will have the opportunity to work from different devices in any location. This is especially important during the COVID-19 pandemic. With Cloud technology, you can set up a working process in your organization just as you want, allowing your employees access to services and storage for maximum efficiency and better collaboration.

Reduced energy expenses

Electricity bills? With cloud technology, while you will not forget about them, the amount of money you will be paying will decrease dramatically. Your organization will only have the essential hardware to work with remote services and storage.

Less carbon footprint

Your organization can also play its part in saving the planet. The world is moving in the direction of a greener future. You can also support this trend by using as few hardware devices in your operations as possible.

The edge over competitors

According to Flexera, over 90% of enterprises are already using Cloud-based applications and services. For larger organizations, it is safe to assume, this technology has become the standard. Middle and small-sized companies, however, can still use the technology to gain an advantage over the competitors and leverage the corporate-level tools for a low price.

Boosted IT agility

You can always refuse to use the services of a certain provider or switch to another provider if they don’t meet your current needs. Of course, this is impossible with old-school IT hardware. The ability to change your technological tools to quickly adjust as per the company’s focus is a crucial advantage in the modern world.

Some Disadvantages of Cloud Computing

Risk of the data loss

Even with the highest security measures, no one can guarantee the complete safety and confidentiality of your data. Later, we will discuss the strategy on how to still benefit from the technology by keeping the most sensitive data on your servers.

Dependency on internet connection

Simply put, without an internet connection the technology will not work. If the connection is slow, the quality of working with the Cloud will lower accordingly. You can’t control this factor; it solely depends on your internet provider. This can result in downtimes, which can cost your business a lot of money.

Vulnerability to hacker attacks

Adhering to the best security practices and having your organization follow the latest security policies still won’t guarantee 100% protection from hacker attacks. You can review your security policies regularly and read about the latest fraud methods online, but there will always be a chance of an attack.

Later in the article, we will discuss different Cloud Deployment Models and explain how they can reduce or eliminate the above-mentioned problems.

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The Most Popular Cloud Service Models

There are three main models for services in the cloud:

  • IaaS, Infrastructure as a Service
  • PaaS, Platform as a Service
  • SaaS, Software as a Service

This combination is often called “the computing stack” because of the cohesion they work with each other in. IaaS contains, what you can think of as, the essential building blocks. PaaS is built based on IaaS, and SaaS is built upon PaaS. Each of these Cloud service models has its own differences and benefits which we will discuss in detail, and we will also offer a description of UCaaS, Unified Communications as a Service.

Infrastructure as a Service

IaaS offers the highest level of control, allowing the user to access most of the Cloud resources. It is automated and very scalable because you can quickly buy the required resources. The Cloud provider is responsible for the services, virtualization, networking, and storage, while you will be able to manage the services, applications, data, runtime, middleware, and operating systems.

Platform as a Service

PaaS allows your IT teams to focus on designing software via the internet. You will need to manage your applications and their data, while the provider will take care of everything else.

Software as a Service

SaaS could be the most popular type among all discussed here. In this scenario, the provider offers the client distributed applications and services via the Cloud. So, you don’t need to download anything, and the provider deals with most of your IT hassle. When you choose SaaS, the provider manages everything, offering your organization only the end-product. All you need to do is to pay a subscription fee and access the application through your browser. The provider is fully responsible for Cloud computing security and the protection of your personal data.

Unified Communications as a Service

One more type we should mention is UCaaS. Sometimes, the providers can offer communication solutions for businesses, offering telephone, email, web, or video conference services via the cloud. The provider, just like with SaaS, takes over all hardware and software details, offering you a working set of tools for stable organizational communication.

Cloud Deployment Models Explained

We can define Cloud Deployment Model as a particular configuration of environment parameters, such as accessibility to storage size and deployment infrastructure. The types of deployment may vary depending on the location of the infrastructure and who is in charge of it. To make the right decision for the organization, you need to know your exact networking, computing, and storage requirements, the free resources you have, and the business goals you need to achieve. It is a good idea to contact an experienced software development company for cloud consulting to help you find the best fit. In this section, we will look at the most common types and their advantages and disadvantages.

Public Cloud

As the name suggests, this model is open to everybody, with the information being created and stored on third-party servers. The provider is responsible for hardware and software, maintaining the service, and offering resources to users. Amazon EC2, Microsoft Azure, or Google App Engine are examples of this model.

Public Cloud

Public Clouds are easy to use and don’t require any coding or maintenance of software—the provider does it for you. You will pay only for the services you are using at the moment and are free to scale up when necessary. The provider guarantees the availability of servers 24/7.

However, when everybody is using the same network, it leads to compromised reliability. The network can crash anytime, and you will lose access to your storage along with everyone. When cloud computing security is an important factor, this model is not the best choice because you will never know where the data is kept and who can access it.

Private Cloud

From a technical standpoint, the Public Cloud and the Private Cloud architectures are quite similar. The real difference lies in availability: Private Cloud is owned by one organization and is also known as the Corporate or Internal model. The server can be located externally or inside the company, but in both scenarios, only one organization uses the hardware and software of the network. This is clearly the best option in terms of Cloud computing security, with more and more large organizations using this model in recent years. Additionally, it is much more customizable compared to the Public model. You can look up the companies such as Amazon, IBM, or Cisco, which provide solutions of this type.

Private Cloud

The biggest disadvantage of the Private Cloud is the cost. It is a very expensive solution that requires buying software, hardware, and additional training of the employees. Probably, this is not the right choice for small businesses.

Community Cloud

This one is similar to the Private model; however, in this case, the infrastructure and the resources are shared between a set of users. For this model to work, all the organizations involved in this must share the same privacy, security, and performance requirements. This Cloud architecture helps organizations save money because all the expenses are shared among the users.

Community Cloud

Regarding its disadvantages, this model is still more expensive than Public Cloud, and you will also have to share the capacities of the infrastructure with other organizations.

Hybrid Cloud

This one allows combining all the benefits of Public, Private, and Community Cloud Deployment Models according to the needs of your organization. For example, the organization can use a Private Cloud for critical and sensitive data, while it can store less important information on the Public Cloud.

Hybrid Cloud

As a result, you will get the advantages you need, such as better scalability or improved security for a lower price compared to Private or Community models.

To sum it up, let’s compare four of these models:

PublicPrivateCommunityHybrid
Requires IT expertise to set upNoYesYesYes
A high level of securityNoYesYesYes
A high level of flexibility and scalabilityYesYesNoYes
The priceLowThe highestShared among usersHigher than Public

How to Calculate the Cost of Cloud Migration?

Complete or partial migration of an organization involves much more than introducing a few Cloud-based applications to the process. Figuring out the final price depends on a variety of factors and requires a strategic approach. Here are the key steps you should take:

Make an audit of your current IT infrastructure

That includes calculating your:

  • Direct costs (hardware and software expenses)
  • IT maintenance costs (including staffing and facility-related costs)
  • Indirect costs (the losses for your organization due to downtime)

Estimate your Cloud infrastructure costs

You need to have a solid understanding of the storage, network, and database capacities required for an organization. To make a more precise estimation, you can use some cloud infrastructure consulting services. Top cloud infrastructure companies, the vendors that provide services, have their own calculators that will give you an idea of the final price:

Calculate Cloud migration execution costs

Depending on the size of your organization and the number of Cloud infrastructure components you will introduce, the price tag for the actual migration may vary dramatically, and it usually includes:

  • A fee for data transferring
  • Integration and app testing expenses
  • Fees for Cloud consulting services

Additional expenses you might have after the migration

This includes monthly infrastructure costs that were calculated at step 2, payments for administration and staff training.

The Risks of Placing Production Services in the Cloud

While every scenario is unique, there are some general risks to consider:

Security and Privacy concerns
If some of your data is very sensitive, you better not use the Cloud for storing it. Additionally, compliance requirements can limit your choices in some Cloud Deployment Models.

Operational downtime
Poorly planned migration strategy and unexpected circumstances can stop your business processes, resulting in losing potential profits.

Added latency
You can experience problems with your internet connection and your cloud-based applications might suffer from latency.

Data loss
Always have a data backup strategy; issues concerning corrupted, incomplete, or missing files can happen to anybody.

Vendor lock-in
Once you choose a vendor, it might be difficult to move to other platforms.

Our Expertise

For 15 years, SPD Group has been delivering research, technology consulting, and software product development services for organizations all over the world. In one of our cases, we helped our partner, a leading financial data provider, with Cloud migration services. The Hybrid Cloud model was chosen to move the data of the highest complexity with the guarantee of integrity. Our experts, proficient in tools such as Kubernetes, TerraForm, Packet, Puppet, made the migration process fast and efficient, without disrupting a single business process of our partner. The Infrastructure as a Code (IaC) approach allowed us to have complete management control and minimize errors. Among the technical highlights are the following:

  • The usage of point-in-time recovery (PITR-compatible) databases for Continuous Data Protection and integrity
  • The implementation of flexible encryption keys management system (automatic key rotation, application-layer encryption) for maximum security
  • Leveraging several layers of hardware and software load balancing to reduce the risk of any DoS (Denial of Service) impact

The migration added 62% to the efficiency of IT infrastructure management. The service remained uptime for 99.998% of the time.

The experts from the SPD Group can help you with:

  • Redeploying solution to a different environment with the change of infrastructure configuration
  • Running a solution on a Cloud provider’s infrastructure
  • Modifying the existing codebase or extension to support modernization requirements with re-host or refactor options for cloud deployment
  • Rewriting and re-architecting a solution completely
  • Replacing one of the existing solutions or a set of solutions with a commercial SaaS

By migrating your business to the Cloud, you can minimize repetitive work, achieve more efficiency and reliability, better status monitoring, and automatic data backup of key resources, standardize business execution, consolidate data for financial control, and evaluate opportunities and risks.

We are experts on this topic, so feel free to contact the SPD Group if you are ready for a consultation.

Summary

What is infrastructure in Cloud computing?

It is a combination of the main components: servers, software, network devices, and storage resources.

What are the business benefits of this technology?

The main business advantage is cutting costs on the necessity of having expensive in-house hardware and your own software. You will be able to scale your business and be flexible to change the direction of your organization quickly, without being limited by IT infrastructure. Among other advantages are cutting energy costs and increasing organizational productivity

Are there any risks your business might face?

Yes, the biggest risk is poor planning of the actual implementation. If you fail to foresee all the technical details and possible breakdowns, you might face downtime, which will lead your organization to lose money. There are also risks with Security and Privacy, as well as data loss, but if you have a trusted vendor and software development company as your partner, this won’t be an issue.

What are the most popular Cloud service models?

For most cases, companies use one of these three: Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service (SaaS). Unified Communications as a Service (UCaaS) is also might be useful for businesses, but it is not that popular.

What are the main 4 deployment models in Cloud computing?

They are Private, Public, Community, and Hybrid Cloud. Each one has its pros and cons in terms of price, security, scalability, flexibility, and required expertise to set up.

Conclusion

With the wider adoption of the 5G internet and advancements in Artificial Intelligence and Machine Learning technology, the future of Cloud computing for businesses is looking extremely promising. AI is going to improve efficiency, while 5G will definitely elevate the speed of connection to an entirely new level. These are only a few of the reasons why, in the next five years, the global Cloud Computing Market will reach an astonishing USD 1025.9 Billion! You can be a part of this worldwide adoption and turn cutting-edge technology into tangible business value by bringing in a Cloud infrastructure for your organization.

Further Reading

  1. Cloud computing — The business perspective — https://www.sciencedirect.com/science/article/abs/pii/S0167923610002393
  2. What is cloud computing? — https://www.zdnet.com/article/what-is-cloud-computing-everything-you-need-to-know-about-the-cloud/
  3. The state of cloud computing in 2020 — https://www.infoworld.com/article/3561329/the-state-of-cloud-computing-in-2020.html
  4. How Cloud Computing Is Changing Management — https://hbr.org/2018/02/how-cloud-computing-is-changing-management

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Roman Chuprina Technical journalist at SPD Group, covering AI/ML, IoT, and Blockchain topics with articles and interviews. April 14, 2021