Why Are Businesses Moving to the Cloud in 2023?

Staying competitive and innovative is important to success and cloud technology allows you to access files faster, interpret complicated data more easily, and touts enhanced security benefits. As a result, more businesses are moving to the cloud in 2021. Cloud technology allows workers to easily access workplace systems, platforms, and files from anywhere while providing safe and secure storage. The cloud also allows companies to slim down hefty IT budgets.

A 2020 Centrify and CensusWide survey revealed that before March 2020, 43% of companies surveyed had no intention to migrate to the cloud fully. But due to the COVID-19 pandemic, 48% are now streamlining their cloud migration plans and around 36% plan on digitizing more of their processes using cloud technology.

But what exactly is the cloud, and why is it imperative to a digital workforce? This article will cover:

• What is the cloud?
• What are the top cloud service providers?
• 8 Benefits for businesses when moving to the cloud
• Potential risks of moving to the cloud
• Examples of businesses moving to the cloud
• What should your business consider before the move?

What is the cloud?

The cloud refers to software, applications, and other services that run on the internet instead of a remote server. Many businesses utilize cloud technology in some capacity to augment or streamline their existing operations, data storage, hosting, and app deployment.

In short, cloud technology allows companies to reengineer their back-end architectures (servers, databases, application software, and more) and put them in virtual environments where they can be accessed remotely, without requiring physical server hardware of their own. Cloud services (also known as web services) are a blanket way to describe these computing capabilities. The cloud also allows any worker with an internet connection to access approved company systems and programs.

What are the top cloud service providers?

There are many options available for companies searching for a cloud service provider. Below are a few of the top service options to consider.

• Amazon Web Services (AWS): Popular with startups looking to get things going in the cloud for cheap, this platform is also powerful enough for large enterprise operations. This cloud service provider is considered the most comprehensive cloud software to date and currently has over 1 million users, including companies like Pfizer, General Electric, and Disney.
• Google Cloud Platform (GCP): This popular PaaS offers cloud computing, storage, big data, and API services so that you can build and launch sites or complex applications in the cloud. It offers things like SQL and NoSQL database services, analytics, virtual machines, all of which can be mixed and matched to suit your needs. Large corporations like Target, the Home Depot, PayPal, Verizon, Facebook, and Twitch all utilize GCP.
• Microsoft Azure: An enterprise-level PaaS and LaaS cloud provider, it offers mobile and web app deployment and scaling, database services, virtual machines, mobile back ends, machine learning, and more. This cloud-based technology might be ideal for companies wanting access to Microsoft’s well-known suite of products within the cloud. Microsoft Azure has hundreds of thousands of customers as of 2020, including H&R Block, Bosch, Whole Foods, Xbox, Citrix, KMG Chemicals, and Reuters.
• Alibaba Cloud: This global cloud technology powers nearly half of China’s websites and is well-known for its security and focus on AI. Companies using this fast-growing cloud program include Ford, AirAsia, Schneider Electric, IHG Hotels & Resorts, and Blackboard.
• Salesforce: Considered the top customer relationship management (CRM) and content management system (CMS), Salesforce also offers cloud functionality that could be ideal for companies already using Salesforce products. Salesforce offers cloud software as a service (SaaS applications) and is used by top companies like Adidas, Coca-Cola, Intuit, Phillips, and Spotify.
• IBM Cloud: A top choice among many Fortune 500 companies, IBM Cloud is a trustworthy cloud technology service that launched a bit later than its top competitors. Unlike other cloud technologies, IBM controls its own implementation, meaning IBM’s own engineers onboard this technology. Top customers include American Airlines, Bitly, Anthem, ExxonMobil, Honeywell, and Whirlpool.
• Heroku: Heroku is a popular PaaS where applications can be completely built, deployed, and run in the cloud. Many companies opt for Heroku for cloud storage, including GoToMeeting, Life.io, Moneytree, Tuft & Needle, and Spiro Technologies.
• Rackspace: This PaaS offers cloud computing through its infrastructure (either dedicated servers, public cloud, or private cloud, all of which can be mixed and matched for a hybrid environment) or partnerships with Azure and AWS. Customers include Ulta Beauty, Mazda, Purdue University, McKesson, and Under Armour.
• Cloud Foundry: This open-source PaaS written in Ruby and Go offers cloud computing services with an enterprise-grade option, Pivotal. Companies using Cloud Foundry include Citibank, Hertz, Verizon, Allstate, and GAP.
• Xen Cloud Platform (XCP): This open-source virtualization solution provides cloud computing and back-end virtualization. XCP includes an enterprise-ready set of tools with the Xen Hypervisor, with the Xen API for cloud, storage and networking operations. Customers include Amazon, Cisco, Google, Intel, Oracle, and Samsung.
• Oracle Cloud: This second-generation enterprise cloud delivers powerful compute and networking performance and includes a comprehensive portfolio of infrastructure and platform cloud services. Companies using Oracle Cloud include Zoom, 7 Eleven, Experian, Dropbox, and FedEx.
• Apache Cloudstack: This is a free, open-source cloud software for creating and deploying cloud services with excellent virtualization support and the AWS API. Customers include Apple, Dell, NetStandard, WebMD, and Zynga.

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8 benefits of moving to the cloud for businesses

There are many benefits companies can experience when moving to cloud technology. This shift can not only help trim budgets but also positively enhance the way your workforce communicates.

1. Cost savings

Before cloud technology, companies needed to pay for on-site servers or even off-site data centers. Cloud technology saves on space and cost by allowing your business to pay a hosting company rather than hosting the servers in-house. For example, Oracle Cloud customers save approximately 30% to 50% by switching to the cloud.

2. Improved data security

Data stored on the cloud is encrypted, making it safer than other hosting solutions. In addition, since cloud technology is updated frequently and newer than older data centers, cloud hosting companies can keep up with the latest cybersecurity threats, while off-site servers are more at risk. In addition, companies don’t have to focus as much on in-house security since cloud hosting companies offer a variety of options to choose from, including firewalls, tokenization, and virtual private networks (VPNs).

3. More transparent data insights and analytics

Cloud technology can bring much-needed insights and analytics to your fingertips in seconds. Not only can you gain access to these insights more quickly, but it’s easier to share, collaborate, and assess these findings with all workers. Many cloud solutions also offer additional analytics tools and functionality, depending on your company’s needs. The four main analytics tools include descriptive, predictive, prescriptive, and diagnostic analytics.

4. Better data recovery

You won’t have to worry about losing data with cloud technology—even if an emergency happens, you’ll be able to access your files from anywhere. Cloud security offers fail-safes—like storing your data and platforms on a secondary site in case of an emergency—for better disaster recovery and business continuity.

5. Ability to scale

Many cloud technology companies offer a pay-as-you-go model for their services, allowing you to adjust as your company grows or changes. This allows you to scale up quickly when needed or slim down your cloud services as your business model adapts.

For instance, you might not need CRM or data analysis tools right away if you’re a startup. Still, if your company were to grow, you might need to expand your cloud technology to include CRM programs and more insightful analytics.

6. Increased collaboration

Cloud technology is perhaps best known for bringing workers and teams together, allowing users to work in documents and spaces at the same time while automatically syncing and storing updates. No more sending hundreds of versions of the same documents—cloud technology always shows you the latest version.

7. More environmentally friendly

By eliminating the need for off-site storage or a data center in-house, your company can save money on power, directly impacting the environment. In addition, since your cloud platform will only provide you with the services you need, you’ll only be using the power required to run your operation and nothing more.

8. Increased time savings

Cloud technology offers time savings in multiple ways. First, rolling out cloud technology allows for faster training and updates than outdated software. But, frequently, cloud companies provide in-house training when needed—communicating and working while remote is also faster and easier thanks to cloud-based collaborative tools.

Potential risks of moving to the cloud

While cloud technology is, no doubt, the future for many businesses, there are some risks you should understand before migrating. A few common risks you’ll want to consider include:

Migration can be time-consuming

Migrating to any new technology requires a time investment, and cloud technologies are no different. While adopting a SaaS model may allow you to slowly upgrade over time, more extensive cloud technology, like IBM, may require longer periods of investment since they use their own engineers.

Potential for existing data loss

Not all software plays well together. Unfortunately, when adopting a cloud technology system, there’s always the chance your old data can’t be easily imported. Whether this means a gap in data or manually having to input old data, prepare yourself for the possibility that your existing data could be lost or no longer easily accessible.

Potential change in data architecture

Even if you can move your old data over, it may not look the way you’re expecting. Each cloud technology has its own methodology for storing, filtering, and accessing data. The hierarchy used might be different, which could mean your old data needs to be resorted or recategorized or—not ideally—re-entered to match the new data architecture.

Decrease in data control using a third party

There’s no way around it—transitioning to cloud computing means handing your data over to a third party. And the way it’s controlled might no longer be up to you. Instead of accessing the data through your server, your assets and systems will now be controlled by the cloud provider, limiting your access to controlling your own data.

Loss of visibility

Along with decreasing the control you have over your data, your IT team’s visibility into how your data is stored and accessed may also be reduced. The trade-off when turning to a cloud storage company is that a third party is now managing the hosting of these systems. As a result, you’ll lose some visibility into your own operations. For instance, you may not be able to resolve technical issues or problems with your firewall any longer, thus leaving your cloud provider to tackle these issues.

New data stored on the cloud can be lost

While data is considered more secure on the cloud, that doesn’t mean it can never be lost. The third-party company could accidentally delete your data or migrate it without backing it up, causing you to lose valuable information, programs, or upgrades. This part of the process is almost entirely out of your control.

Technical assistance is outsourced

Suppose your company or any of your workers experiences technical issues with your cloud provider. In that case, you’ll typically be required to reach out to a customer assistance line via chat, phone, or email. Depending on your service level and the cloud provider you’ve chosen, responses to technical issues could take days, slowing down your business productivity.

Examples of businesses moving to the cloud

Today, many businesses can’t function without the cloud. In fact, some services and platforms you use every day benefit thanks to cloud technology. Let’s look at a few case studies to learn more.

Netflix

Netflix was an early adopter of cloud technology before many even understood what the cloud was. During the pandemic, Netflix pushed its cloud technology to new levels. It produced the fourth season of its hit show “The Crown” using Amazon Web Services’ cloud technology, specifically for post-production VFX work. Later in 2021, Netflix expanded its visual effects studio to allow animation artists and other effects editors to work seamlessly together using AWS.

Twitter

Before the pandemic, the popular social media network migrated to Google Cloud—a six-month transition designed to offer Twitter more functionality and flexibility. As of March 2020, Twitter developers and engineers have built new features in record time. Twitter’s real-time data pipeline has also seen tremendous improvements since switching to Google Cloud.

National Basketball Association (NBA)

The NBA has designed CourtOptix with the help of Microsoft Azure—to bring AI-driven insights into the hands of workers and fans. This new analysis system has already been unveiled on the NBA’s official Twitter account and is now used to bring meaningful insights to game broadcasts. Using AI and Microsoft Azure, the NBA can now “find interesting nuggets in those billions of data points” it was previously sitting on.

What should your business consider before the move?

There are some clear advantages to using the cloud—whether it’s going entirely to the cloud or using a hybrid approach that breaks up your server workload between on-premises infrastructure and the cloud. Companies can strike a strategic balance between traditional on-site servers and cloud servers, so it’s important to ask yourself a few questions about your setup before choosing the one that’s right for you.

1. Take a look at your existing back-end infrastructure.

What are your requirements, and what are your end-users requirements? What will diversifying to the cloud do to help with these? Consider the compatibility of your server-side software. While some businesses don’t move all of their server-side architecture to the cloud, it’s helpful to ensure cloud compatibility in the components they keep on-site.

2. Decide what should go where.

Plan how you’ll virtualize your back end. If you’re a small business, basic server functions like an email server or an app server could probably stay on-site. Apps that don’t require as much data storage could stay local, too. Be sure to prioritize your needs. You may opt to divide up the workload with a hybrid cloud environment, keeping mini servers on-site to handle smaller workloads, like file-sharing servers. These can even be designed to sync up with cloud drives.

3. What’s your budget?

This will help narrow down which cloud service is right for you. The great thing about the cloud? Flexibility. If you start out small and find you need more, you can easily upgrade subscriptions or buy more data—no need to switch out hard drives.

4. Who should you hire or have on your team to help?

Do you have a server professional available to help with maintenance or fixes? Because you don’t have to worry about hardware with cloud servers, it can be a more seamless integration for IT professionals, but it’s not without its quirks. Make sure you have a DevOps engineer who has plenty of experience integrating with the cloud and handling issues with network reliability that can arise. Connect with the best independent DevOps engineers through Upwork.

5. How scalable does it need to be?

Scalability is a key focus for many businesses. How much growth you anticipate in terms of traffic and data for your application or site’s server plays a very important role in how you decide to set up your server. You’ll want to be able to expand your server space without having to totally replace it, whether that means starting with a setup that allows you to switch out your old hard drives for new hard drives with more memory or virtualizing your setup across numerous smaller servers.

6. What type of security environment do you need?

Security is always a big concern—if you have very sensitive information stored on your server, you may opt to keep that on-site while moving less sensitive information to the cloud. Or you can go for a private cloud/hybrid cloud environment that allows you to maintain a more secure environment and lets your IT professionals keep tighter control on what data is stored/shared where.

Conclusion

Cloud adoption is a popular option for companies looking to cut costs, streamline efficiency, and ensure systems and data are available to workers anywhere. Cloud technology can enhance business processes, and companies can slowly transition from servers to cloud providers, scaling up or down as needed.

Cloud technology is clearly the future of the business place—and as this technology continues to evolve, the benefits it offers are sure to expand as well.

Upwork is not affiliated with and does not sponsor or endorse any of the tools or services discussed in this section. These tools and services are provided only as potential options, and each reader and company should take the time needed to adequately analyze and determine the tools or services that would best fit their specific needs and situation.