Cloud Computing: what it is and what business advantages it gives

In the next 5 years, 95% of all business workloads will be migrated to the cloud. Companies use cloud computing for various tasks, starting from critical data backups and to moving specific IT-services or their whole IT-infrastructure to the cloud. As it is reliable, comfortable and cost-efficient.

We cooperate with a GigaCloud cloud provider to host VoIP and our other offers in the cloud. This way, our clients receive fault-tolerant services and are able to work with them from any corner of the world.

Here, we will cover what cloud computing is as well as what possibilities and advantages it gives to business, large or small.

What constitutes cloud computing

Cloud computing is a model of providing services for information storage, processing and analysis through the web.

Business doesn’t require to purchase or maintain its own equipment, it can rather rent the necessary amount of computing resources with pay-per-use.

Instead of storing files and documents on a hard drive or flash drive, the user can put them in the cloud to enable their access from any location and device, provided there is internet connection.

Cloud computing opens up new business possibilities, helping to improve, save costs and stimulate expansion.

What business tasks cloud technologies can solve

●  New project development. Extra capacities are often required when launching new projects. A purchase of additional equipment could be a lost cause if a project turns out to be unsuccessful and destined to be abandoned. The servers will be idle.

●  Business scale-up. Opening one more office in another city or country, entering new markets, yet again requires additional capacity, which can take time and money. The cloud allows you to pay only for the engaged resources.

●  Stable work. For downtime sensitive businesses, a reliable data and services protection should be ensured. Cloud technologies make it possible for data to be stored within the geographically distributed data centers, providing 99.95% uptime availability.

●  Equipment update. Servers have a limited service life, usually they need to be updated every 3-5 years. This leads to increased costs for their maintenance or modernization.

●  Conformity with the national and international information security requirements. For state organizations, critical infrastructure facilities, medical institutions or companies that deal with customer payment data, it is important to meet information security standards. To operate a business in Europe, you need to comply with the GDPR. Hosting in a certified cloud resolves these issues.

●  Data backup. In order not to lose data due to force-majeures, it has to be reserved and securely stored. An on-premise server to host the main IT-infrastructure is not the best option in this case.

Cloud rental vs hardware purchase

There are many costs that companies have to bear while doing business. These expenses can be either one-time (capital) or permanent (operational).

Capital Expenditure (CapEx) is the cost it takes for a business to acquire assets that will generate revenue beyond the end of the current year.

Speaking of IT-related context, the capital costs are as follows: purchase of equipment, its maintenance and optimization, placement, purchase of licenses, organization of IT-infrastructure security.

Hardware purchase involves spending a large amount of money at once. A good server costs around $6000-7000. And to build a fault-tolerant platform, you need to purchase at least four servers, a data storage system, and licenses. It is necessary to rent premises or arrange a server room in the office, ensure its proper ventilation and air conditioning. Over time, equipment ages and needs to be updated. Which means that expenses have to be borne again. Sure, you can place a server in a data center, but the colocation fee will be about $400 per month.

With a minimum tolerable business margin of 15%, the payback of capital investments in your own “gear” takes over 5 years, after which the costs will pay off and you will start benefiting from it.

Operating expenses (OpEx) are expenses related to ensuring the stable business operation. Cloud rental is OpEx.

The company makes monthly payments and does not worry about anything. The cloud allows you to reduce or increase the number of computing resources and pay only for the ones actually used. There is no need to buy and update equipment, set up a server room or pay for colocation.

If a company is seeking growth, new projects launches and innovation, it will be a wise choice for it to do away with the purchase of physical equipment and choose the cloud instead. But if your goal is to sell the company in the future, it is better to opt for CapEx. Because the larger the capitalization, the higher the price. However, it is necessary to understand that over time the equipment becomes old, and the costs of its maintenance will increase.

Cloud advantages

Cost optimization

The cloud eliminates the need to purchase, maintain and upgrade a server park. It is possible to order the configuration of the cloud infrastructure that is necessary to solve a specific task, and technical resources can be easily changed in relation to the company needs.

Comfort and flexibility

Cloud provides more freedom in using VoIP and virtual telephone exchanges. Your employees will be able to access the platform any time, from any device and any corner of the world, connected to the internet.

Information security

The data is located in reliable data centers that meet international standards. The high level of information security in the cloud is confirmed by audits and international certificates. Namely, ISO 27001, ISO 27701, CSIP, PCI DSS.

Reliable data protection

Reliable cloud operators provide financial guarantees for the availability of their systems. Usually this level is 99.95%. It is also possible to create backups and build a backup data center in case of serious force majeures, such as DDoS attacks, viruses, etc. Data can be restored from backups and keep on working without loss.

How to choose a cloud provider

●      Define your business needs. Find out what exactly you expect from the cloud: what tasks it should solve, what business processes should be covered. 

●  Mind the cost. Compare the billing plans of different cloud providers before making a final decision.

●  Read reviews and ask the people you trust for their opinion. Read user reviews about the services of various providers.

●  Find out how data protection is handled. Ideally, the cloud operator places its equipment in several data centers, at least one of which is located abroad. All these data centers must meet standards no lower than TIER III, which guarantees mandatory duplication of all systems, constant 24/7 supervision and a high level of physical security.

●  Make sure there is a trial. It is necessary to clearly define when the test period starts, whether it is before or after the client’s data migration. It is also important to specify how long it lasts and whether it is free.

●  Check whether the cloud provider provides technical support. Find out how the technical support specialists work, what language they use to respond, and whether they provide their services for free.

Considering all these criteria, we have selected GigaCloud as our partner cloud provider. We provide our clients with VoIP and other services based on its cloud.

Conclusion

Increasingly more companies are switching from local data centers and their on-premise servers to the cloud. Thus, they don’t spend the budget on buying and updating equipment, licenses, maintenance, support, etc., but only pay a subscription fee. The businesses outsource IT-infrastructure support to a cloud provider, and repurposes the saved money to launch new projects or scaling. This is an advantage that can determine the development of small, medium and large businesses, both in times of economic instability and after it.