Executives and entrepreneurs alike are keen to understand the benefits of migrating to the cloud, in light of the trend of SMEs migrating their data storage and other computing functions. What does “the cloud” mean in a business or government agency context, and is your company poised to reap the benefits of cloud migration?
Defining the Cloud
The cloud is a model where an organization’s computer functions are handled remotely on a system of servers housed elsewhere, and typically made available on a pay-per-use basis. Rather than processing power and data systems being located in-house, under the cloud they are effectively rented from a large organization that makes their own systems available to customers.
While the term can be used to describe any application for off-site computing, here it is used to refer to either data storage or processing, which are the main two applications for SMEs. Many companies use cloud-based storage systems, for instance, but don’t require powerful computing processes, so keep these systems in-house.
The cloud, which is centralized and remote, represents an alternative for both individuals and organizations to storing data and using processing on their own machines. “Migrating” to the cloud means moving applications, data, and systems from an in-house server to a cloud-based server. But what are the benefits?
There are several types of cloud deployments, ranging from private clouds (which serve a single organization) up to public and hybrid clouds (which house the systems for multiple clients). When you hear about the benefits of migrating to the cloud, typically what is being discussed is a multi-user public cloud provided by a large firm like Amazon Web Services, IBM, Google, or Microsoft.
Benefits of Migrating to the Cloud, Broken Down
The majority of the cloud migration benefits discussed below relate to the economies of scale which stem from a large and centralized organization hosting web servers. From enhancing security to lowering costs, increasing accessibility in the aftermath of disasters to remaining relevant and competitive, the major benefits of migrating to the cloud are covered below, equipping you with the information you need to make a decision about moving to the cloud.
1. Substantially Enhancing Safety, Privacy, and Security
The cloud has much greater security than older network-based systems, and according to numerous SMEs, enhanced data security is one of the main benefits of migrating to the cloud.
As well as being centrally managed and stored off-site, once your data is in the cloud it can also benefit from automated security systems, automatic updates, and cyber monitoring. Cloud companies like Amazon Web Services, Microsoft, and Google are constantly updating their systems to prevent any vulnerability. As a result, they qualify for the most highly respected compliance certifications and attestations.
As the secure processing of data takes an increasingly central role in the conversation about corporate governance and responsibilities to consumers, it is likely that secure data storage will become essential to any organization which captures or processes client data, not just firms in finance, healthcare, and defense.
2. Cloud-Migration Savings for Companies Who Outsource Their Storage and Processing
One of the major benefits of migrating data storage and computer processing to the cloud is financial. Many SMEs in the high-growth stages of their development make use of external storage and computing companies to run their data and processing functions. However, there are substantial savings which can be realized by moving these functions from an external contractor, also known as a server center, to the cloud.
Because cloud services are typically contracted on a pay-per-use basis, meaning that you only pay for the processing which you use, there is a saving per unit. Between power, maintenance, cooling, and human resources, data centers run high costs, which are passed onto the businesses which contract them in the form of operational costs. These contracts are arranged as fixed costs, meaning that when using a data center, you typically pay for processing and data storage you don’t even end up using.
The cloud, on the other hand, benefits from vast economies of scale and is usually made available to the client on a pay-as-you-go basis. Furthermore, cloud computing is a buyer’s market, with the three largest firms keen to obtain market share by passing these savings onto the consumer.
3. Cloud-Migration Savings for Companies Who Manage Their Storage and Processing In-House
If you’re not using the cloud or utilizing the services of a server center, then your business is probably taking care of processing and data in-house. If this is the case, you may find substantial savings by migrating to the cloud.
Organizations that still house their own servers can enjoy even better benefits of migrating to the cloud, as their current data and processing costs come out of the capital expenses, rather than operational costs. That is to say, if your computing costs are managed in-house, you’ll be required to make an initial investment, and then be on the hook for any maintenance costs, system upgrades, and software updates.
With the cloud, you only pay for what you use. Within the industry, estimates of cost savings vary, but the consensus is that cloud computing will reduce small, medium, and substantial businesses’ pre-cloud IT overhead. Savings can be as much as 45%, without factoring in productivity gains from the increased efficiencies.
The savings to be garnered include those of switching from a fixed-cost model to a pay-per-use model which also benefits from economies of scale. Additionally, there are savings in opportunity costs by taking advantage of the cloud model. The cloud offers automated and centralized functions which otherwise you’ll have to take care of in-house, paying for the services of a payroll employee or dedicated contractor.
4. Increasing Accessibility from Secondary and Tertiary Locations
While you of course need to ensure access to your data from your office or place of business, increasingly firms are finding that a centralized, cloud-based data storage approach is allowing for greater flexibility.
In the event of a fire, natural disaster, or incident of civil unrest, your data remains securely held in the cloud, where your employees are able to access it from any location (though we recommend using a VPN if accessing data over public Wi-Fi). The year 2021 saw a substantial increase in working from home and a corresponding uptick in small and medium-sized businesses migrating a number of software applications to the cloud. Paradoxically, migrating data and infrastructure out of your office’s system and to a removed, remote, cloud-based location will enhance your ability to access it.
Companies with devolved operations in industries with field staff as well as HQ staff are seeing particular added value. Firms in resource extraction, logistics, and security often need to use arcane and secure systems from remote locations where infrastructure is inaccessible.
Aside from the ability to access and process your data from your home, a satellite office, or the field, cloud providers offer a number of automated monitoring services. If there is an outage or your app is experiencing technical problems, for instance, the cloud company will pick this up and notify you, freeing up staff who would otherwise be tasked with this tedious responsibility.
5. Remaining Competitive in the Working from Home Era
The events of the COVID-19 pandemic have fundamentally altered the way that companies think about their premises and where work can be performed. Already organizations that are not equipped to accommodate employees working from home are coming across as antiquated in many industries. In order to recruit and retain top talent, a business must demonstrate that its systems and processes can all be undertaken remotely, or it risks losing out on market share to companies that have embraced the cloud.
That said, there are a whole host of digital security risks which emerge when employees start accessing sensitive information from home. Therefore, it has never been more important to securely store data which will be accessed remotely.
One of the major cloud migration benefits is the peace of mind which comes from knowing that whatever happens to your office building, your data and systems are safe and accessible by staff. Because the data and the processing systems are housed in the cloud rather than a physical location which your company requires physical access to, crises impacting your office become less disruptive to your company’s work.
6. Staying On the Cutting Edge and Avoiding Obsolescence
There is a serious risk that companies which fail to modernize by taking advantage of recent innovations will struggle to keep up with their more dynamic and forward-looking competitors. Ultimately, innovations replace their predecessors, and time and resources are spent engaging applications which are not easily compatible with contemporary technologies. Computing power and data storage are being consolidated, and previous, non-cloud based solutions are quickly becoming relics.
Among the business practices that no longer make sense in light of recent developments, so too is the age of the system managed in-house or the infrastructure rented by the small private company. Obsolescence is a serious risk for firms which fail to update their systems. Cloud-based infrastructure is flexible, making it an excellent choice not only for high-growth businesses, but for companies looking to scale up or down.
Contact Sentient Digital to Start Reaping the Benefits of Migrating to the Cloud
To learn more about cloud applications, cloud migration benefits, and secure migrations of systems and processes from in-house servers to cloud-based equivalents, get in touch with Sentient Digital today.