In this article, I want to drill into some key benefits of cloud computing because they have real world value to your company both in cost savings and lower risk, amongst other factors.
In my last article, I gave an introduction to cloud computing for people who aren’t necessarily technical and we learned a some key points:
Cloud computing, under the hood, is essentially like many bento boxes [physical servers] holding many bento box containers [virtual servers]
These virtual servers are software servers that run just like physical ones except they borrow their resources from one or more physical servers as opposed to having their own
The cloud's key benefits come from the fact that it is virtual
These benefits help business owners and senior management effectively monitor their costs, getting the most out of their data to aid decision making or being prepared for the unknown
Cost
The key benefit I am discussing here deals with the concept of Economies of Scale. As we know from our economics classes, this term refers to reducing the cost per unit as a company increases scale therefore becoming more cost efficient. An example would be the buying power of a big box store chain vs a small, single location business.
Consider the servers that run your company’s applications, website and hold its data. Those are likely on-site or in a shared data centre. Now, think about the cost of floor space for the servers to sit on, the power consumption, the insurance as well as the buying and maintaining of the servers themselves. The cost for this is covered by your company and the price of this is determined by the volume that is purchased.
The shared data centre scenario has better Economies of Scales than the on-site scenario until a company grows to a size where they need their own data centre. An example would be the big five banks in Canada. They have tens of thousands of employees and have their own data centres. Furthermore, their data centres need to be accessible by the IT teams that manage them. Due to the Economies of Scale, these data centres run at a lower cost point due to the efficiency they are able to achieve (versus a smaller business) and still have room for further cost reductions.
Now consider even bigger computing companies like Microsoft, Google or Amazon. The number of servers that they are buying for their cloud operations means they get them virtually at cost. They invest in massive warehouses to house their cloud servers on campuses in very low cost areas. Due to the lower cost locations and servers, they can operate at a very low cost per unit. This is passed onto the consumer in the form of decreased operating cost. On a side note, Microsoft has even experimented with underwater server farms in the ocean.
Another point to consider about cloud computing is that the virtual nature of the cloud allows for server resources, or servers themselves, to be turned on and off, dialed up or throttled down as needed with instant effect. Most providers use a pay-as-you-go plan, so the price paid is entirely dependent on what resources are used. Further, there are efficiency gains in server management and data access.
Lastly, a concern amongst decision makers is the cost of initial migration and enablement. The true ROI for cloud computing are the ongoing savings and the gains in efficiency. All of these when taken holistically, offer lower ongoing costs and higher returns.
Security
IT security is an ongoing concern that keeps people up at night - and rightly so! A big ”for instance” was 10 days before this past Christmas, the US Government was hacked in what was called the biggest hack of the US government ever. If THEY can get hacked then we all can get hacked.
With that in mind, is there no hope? Of course there is! The best way to handle cyber security is by investing in leading edge security best practices and infrastructure. That costs money and everyone from companies down to individuals only have so much budget for such things. This comes back to the Economies of Scale and we saw, the cloud providers excel at maximizing this.
If you are doing this on-site, in particular, then you require a team of one or more people to manage your servers and security needs. This team needs to be up-to-date on a myriad of subjects, constantly monitoring for cyber threats and potential physical failures of the servers themselves. In short, they are spread across many different tasks whereas the security teams that manage the cloud servers, that's their main job.
Given the limited budget that can be put towards security, the traditional on-site model likely has some gaps, whether they be partially or completely unmet needs, that can be exploited by hackers.
The Shared Responsibility Model of cloud computing helps resolve this risk. The diagram below contrasts a traditional hosting approach to security versus a cloud enabled (cloud hosted) approach.
Cloud security technology is enterprise grade and built into the infrastructure of the cloud platform. Depending on which flavour of cloud is being used, the ratio of responsibility between the company and provider shifts.
The bottom line is that by utilizing cloud security technology and shifting responsibilities to the cloud provider, security effectiveness is drastically increased and companies are able to reallocate resources to other security concerns or even other business needs.
The cloud's physical network of servers which underlies the virtual network and servers that represent your company's infrastructure are protected by layers of security. The secret sauce to the cloud's superior security measures is the high level of encryption they employ. This ensures that all data communication is safe and secure.
TMH Solutions is a cloud solutions company that can bring these benefits and more to your company. We look forward to discussing your vision on how to make your company future ready.