According to a research titled Cloud Computing Market by Service Model – Global Forecast to 2026, the global cloud computing market size is set to grow from $445.3 billion in 2021 to $947.3 billion by the year 2026. This is at a compound annual growth rate of 16.3%. A Gartner.com press release says that the number of companies shifting to the cloud has been on the rise since the beginning of the Covid-19 pandemic. IT spends on the cloud are slated to touch 14.2% of the total global enterprise IT spending in 2024.
The cloud has grown to become a highly in-demand solution for companies across industries. This is because of its ability to completely transform pre-existing business models. According to Flexera’s 2021 State of the Cloud report, 54% of enterprise workloads will be moving to the cloud. Here’s why –
Increase in Operational Flexibility: Companies work to be on a constant growth trajectory. As they continue to expand, their operational needs grow too. The need for more servers and allocating server space increases. No longer is there a dependence solely on on-premise solutions. A business is charged for the added server space it takes on, how much storage space is bought and the time that will be spent on the server. This empowers businesses to scale up operations based on demand. Scaling is also flexible, increasing when there is heightened demand and decreasing when the workflow is low.
Creation of an Effective Customer Support Strategy: With the cloud, a business will be able to handle all its customer needs systematically and effectively. With the cloud, a business can create a range of customer-oriented apps, which are personalized for unique experiences. Employees of an organization, no matter where in the world they are based, will be able to access any information related to the customer’s experience with the app. With this information, the employee is in a better position to provide a customer with feedback and any support the customer requires, in real-time. What the cloud has essentially done is simplify how employees and customers connect in a mobile or desktop interaction.
Savings – in costs and time: When data is stored centrally, everyone in the organization gets a chance to access information from across various locations. This feature helps save time when working out a solution for a problem. Time is of the essence for an organization and this feature helps enhance productivity while saving costs. It means that employees can get a lot more done in a short period.
Cost-effectiveness: The cloud can bring down costs for a business. Since a company will pay only for the storage space it needs and the time spent on the server, there are tremendous savings in server rents and other infrastructural-related costs. Traditional server forms require manpower to constantly maintain and update them. With the cloud, the resources a business needs for this is reduced because it is taken care of by the service provider. This works out as direct savings for a company with lower overheads and salaries to pay.
Enhanced security features: Cloud providers are constantly working on providing their clients with the latest in security protocols. The technology world is constantly dealing with threats to the security of data, more so now than ever. Service providers tailor their services to meet the needs of the business and ensure the safety of its data. With data stored in a centralized location, several security tools can be put in place to ensure maximum security to stored data.
Better flexibility: When a company stores its data in the cloud, it provides its employees with a great deal of flexibility in accessing this information. Employees can be located anywhere in the world and will have the ability to access customer-related data, with the right credentials. This was not a possibility with on-site servers, which restricted access. With everything now accessible through the cloud, there is no longer the requirement of a hard copy of data. Storage is easy and everything much more accessible, irrespective of time and location.
Cloud Computing Challenges to Watch Out for in 2022
With several such benefits, there is no doubt that there has been an increase in cloud migration and the use of cloud technology. According to research by Mordor Intelligence, the cloud migration market stood at $119.13 billion in 2020 and is set to reach $448.34 billion by 2026 with a CAGR of 28.9% between 2021 and 2026.
By 2022, Gartner projects that 90% of organizations purchasing public cloud IaaS will do so from an integrated IaaS and platform as a service (PaaS) provider. The hybrid cloud is going to be the new normal with more than 90% of global enterprises turning to it by 2022 says another Gartner report.
While the demand for the cloud has increased exponentially, there are some challenges that companies need to look out for during migration and implementation. Here is a look at what to expect.
Evolving Threats to Data Security and Privacy: When data is stored in the cloud, there will always be concerns about security and privacy. Virus attacks, cyber-hacking, stealing of digital data, compromised interfaces, and hacked APIs are all genuine concerns with threats becoming more sophisticated with each passing day. According to Proofpoint, the financial setbacks from cloud account compromises is around $6.2 million for a single year. As an enterprise considering cloud migration for your data, you have to especially focus on making a safe transfer of customer data to a third-party service provider. Check with the service provider on their compliance with the local and international laws governing data. Understand clearly what they provide in terms of data security and privacy. Also thoroughly examine the backup measures the service provider has in place should a disaster hit, especially those related to data recovery and security.
Staying Away from Vendor Lock-Ins
A major challenge during cloud migration is ensuring that applications that are being run on one platform continue to function unhindered during the migration process to a new cloud. The service provider must work on changing the code and design to make it compliant to the new cloud before it locks in any consumer data or service. This can help ensure a smooth transition. However, the key issue here continues to be that cloud computing organizations do not use a standardized set of languages on their platform. What may be used in your current platform, may not be what is being used in the cloud you are migrating to. Your business may end up in a vendor lock-in if you are unable to find a viable alternative platform that is within your budget. Changing to a new language platform can be an expensive affair.
Ensuring the IT Department Always Has Control
According to standard operating measures, it is the cloud service provider who controls all the infrastructural resources. Companies that use their services have to abide by their policies. The fears around data quality and risk management is always a challenge when adopting cloud computing. To ensure that there are no pitfalls during the cloud migration process there has to be strong governance and control protocols when deploying the cloud across the various departments of the company. With the appropriate IT governance from the in-house IT team, all assets provided by the vendor can be implemented based on policies that have been mutually agreed on. The IT team should always ensure it has complete control over the maintenance of its data assets and their usage to achieve the company’s goals.
Managing Cloud Spending
Cloud computing is an expensive investment for companies and hence have to constantly optimize their costs and monitor expenses. The main idea behind cloud computing is to save money for the company with minimal investment in hardware. It should give the organization the ability to scale up or down as needed. The benefits can be seen for companies of all sizes, but smart monitoring of the costs will dictate how ROI on cloud computing investment.
Managing Multi-cloud Environments
Recently, there has been an increase in the deployment of multi-cloud environments. Often companies prefer to merge both private and public clouds. A 2019 Flexera report titled State of the Cloud found that 84% of companies already had a multi-cloud setup and around 58% of companies surveyed were looking at creating a hybrid cloud strategy. For any business, a multi-cloud approach is a good idea as it eliminates being dependent on a single service provider. This prevents any downtime and can be a cost-effective proposition too. However, where there are complex architectures involved, data-related issues may crop up. A business will also have to deal with multiple vendors, each with different operational protocols. The in-house IT team will have to be knowledgeable and well-equipped to handle multiple vendors, cloud environments, the constant evolution of software, governance, and compliance.
Interoperability refers to the exchange and use of information between two applications. In the case of clouds, it refers to service providers being able to easily integrate into the platforms of other vendors. This is a problem area, especially because vendors are often trying to connect a legacy system and an outdated one. In such cases, running analytics can be difficult. Before migration takes place, a data pipeline needs to be created which integrates into the new system and enhances performance.
Compliance is a big deal in the world of cloud computing. Being compliant with the laws of the industry and all the regulations set down for any business that utilizes cloud storage and backup is a must. When a company plans to move their data to the cloud, it will have to comply with policies, especially when dealing with data from public sources. Finding the perfect cloud service provider, in this case, is a challenge. You will need cloud vendors that offer flexibility – are compliant with regulations in their base country as well as with any others that your data may be concerned with. There has to be complete transparency during negotiations on this.
Managing Resources and Expertise
As companies work on transferring their data and workflow to the cloud, the need for expertise to manage the process and its implementation grows bigger. Finding the right tools and qualified experts to handle all of this can be a challenge for companies. One way to deal with this is to have a trained and dedicated IT and development team onboard. This will require a significant investment, especially if you are up-skilling your existing staff or hiring highly qualified professionals. While this may be an expensive proposition for small and medium-sized businesses, an alternative could be to consider automated cloud management systems and technologies. This helps with monitoring resources, their usage patterns and ensuring back-ups happen routinely. The tools used to manage resources can help a company optimize cloud costs, its governance and its security and open up the full potential of cloud computing.
Challenges of Downtime
When a company moves to the cloud, they end up being dependent on the cloud service provider. A key challenge to address here is what the service provider has in place to ensure there is zero to minimal downtime. Critical decision-making in a company is often based on real-time data, and if there is an interruption in the flow of this information, it can cost your organization heavily. Finding a service provider that ensures there is no downtime is important to onboarding a cloud computing vendor.
Building private cloud environments
Building a private cloud is a complex process. Private clouds come with their sets of performance challenges, along with a host of possible issues related to their architecture and the security threats they may face. However, building a private cloud is something several companies are opting for, primarily for the benefit of it being built on-premise. It gives the company better control over its data and the cloud resources that are shared. Setting up the private cloud involves several aspects like creating and setting up a virtual local area network (VLAN), bringing in RHEL, introducing server software patches, setting up firewalls and daily back-ups, and more. One of the key ways to help implement a private cloud system is to automate as many processes as possible. Choose the service provider who will place quality of service ahead of everything else. This is what you expect as a customer and what your customers expect of your company. From a wide range of computing resources to high levels of customer satisfaction, the service provider should be a caretaker of sustainable data processing and constantly work at reputation building. These are non-negotiable elements of your cloud computing strategy.