What’s up there in the clouds? Benefits, innovations, and the most customer-centric system
If you are a power Internet user, you know everything about the cloud already. Just a few years ago, people carried hard drives for their work, but now they can access files, work from remote locations, listen to music, or watch videos from anywhere. It’s all saved in the clouds. Even when your back-up your phone on the cloud, its all in the same place.
First, what does it mean to be in the ‘cloud’? It doesn’t mean its just ‘up there’, despite what the visual imagery suggests. Information is stored across disparate data centers managed by the cloud service provider. Using a multi-tenant architectural system, the cloud-storage provider can give different customers the complete service experience. The customers don’t have to spring for their own servers and can leverage the power of collective computing to solve their daily needs.
This is all fine for individual users, but what about enterprise clients with hundreds or thousands of users, each with their own data points and computational requirements? This is where enterprise cloud solutions come into play.
What’s in it for the enterprises? Why not just build servers on-premise?
Well, one can. Building on-premise was the way-to-go a few years ago. In fact, internal infrastructure was a core competency, slowly building capabilities for payouts over a longer timeline. But this is when Myspace had just discovered that Facebook was a competitor. Times have changed. People have changed, and along with that, the way the pace and ease with which they consume information has changed.
Let’s list some benefits (which is quite self-evident by now) of being on the cloud for enterprises and then we will move to the main takeaways.
Scaling: “Previously, On the Enterprise Front!”, there was a reason to hold infrastructure on-premise in the name of security and scalability. Zoom in to now, the tables have turned. It’s far more scalable to be on the cloud and more secure. Why? It’s simple.
Unless the company is extremely isolated, it would need to constantly interact with vendors, customers, and authorities. All these interactions don’t have to move through private channels. It’s not like the customer would remember their feedback or suggestions till the point as when the company comes back to ask them. They want to share it right then and there and its important for the company to be ‘there’ to capture it in their system. Most of the company processes happen offsite now and cloud is the only way they can scale-up their business.
Security: And it’s more secure than on-premise. Do you really think that companies like Amazon and Google would leave security to chance? Information across customers are deeply compartmentalized. No one customer can access the info of any other. Even large data sets are spread over multiple data centers. It’s much easier for a hacker to overcome the local firewalls of a company’s on-premise set-up but it’s that much harder to attack a cloud service provider. Also, on-premise holds more risk in terms of local calamities such as earthquakes or break-ins. Since the info is spread across different locations (data centers), the risk of any one center going down doesn’t compromise all the information (and even then the part is deeply encrypted).
Faster Go-to-Market: It isn’t necessary to explain why this important, every company wants this. The fastest and best way to do this with the cloud. Software specialized in optimizing and speeding-up the distribution can be integrated with legacy systems. The customer-feedback to product-implementation distance can be minimized. Companies can react better as they can track and visualize all their external processes. Such a seamless movement of information, cutting down decision time, wasn’t possible with on-premise solutions.
High Innovation: Earlier companies set out departments to innovate with technology, sometimes diverting from their actual core-competency. Isn’t it obvious? If you are a candy company, make candies, don’t spend time building apps to improve the factory to distributor movement of candies. It distracts them from innovating for making better candies, and they are eventually pushed out of the market. Because they didn’t make good CANDY. That’s the thing, for Software as a Service (SaaS) companies, it’s about making good SaaS products so that their clients can make good candy. SaaS companies can leverage their core-competency, industry and technical know-how to build the best solutions.
Total Cost of Ownership: “Meanwhile, in the Boardroom”, it often comes down to the dollar-benefit of the tech adoption. On-premise supports quote that investing in it would be costly now but over time, the company can benefit from the economies of scale and bring down their operation costs. They say that cloud software, with subscription fees, would consistently cost the company as long as they use it. This is partly true, but the part that’s true favors cloud software.
Tech investment is not something you just write-off in your balance sheet, it’s about building for the future. With on-premise servers, even though the cost diminishes over time, their outdatedness increases. What’s the point of owning a cost-effective system which was relevant three years ago?
If you look at events like the Prime Day, Singles’ Day, Black Friday, Cyber Monday, and tons of others, customers want next-day, even same-day deliveries. The Amazons and Alibabas know they would handle millions of packages in a day, almost all marked for quick delivery and they will have to manage them all to sustain their brand value. Still, they pump in enormous amounts to keep these mega-sales events running, simply because they have the tech and logistics innovation going for them.
The problem statement a company faced three years ago isn’t close to what they actually face now, or what they would face three years later. What’s the point of building an on-premise system for years, diverting resources that way, where even the updates would mean significant overhaul and downtime? Cloud gives them the surety of running with the times with high-value upgrades in almost no downtime. The total cost of ownership tips the scale towards the clouds. It’s more about the ‘Total Benefit of Ownership’.
In the ‘Part 2’ of this cloud saga, we would touch base on how cloud-based optimization services are smoothening all logistics movement!8