New business models have emerged as a result of technologies like artificial intelligence, machine learning, big data, IoT, etc., rendering outdated business practices ineffective. Businesses that have been operating in their respective fields for years now face the urgent need to adapt their current business model to meet the demands of contemporary customers. These organizations implement this transition through digital transformation.
Businesses have been attempting to use new technology and approaches to boost production, efficiency, and customer satisfaction. Cloud computing is one of the major technologies that has emerged as a game-changer for enterprises.
What is Cloud Computing?
The distribution of computing services, such as servers, storage, databases, networking, software, analytics, and more, over the internet is referred to as cloud computing. Companies can access these services through cloud providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP), as opposed to depending on on-premises hardware and software.
The way businesses manage their IT infrastructure, data storage, and application development has been completely transformed by cloud computing. It has made it possible for businesses to expand their resources as necessary, lower IT expenses, and improve security and compliance. Additionally, it has created new opportunities for cooperation across teams and departments as well as for creativity and agility.
Statistics on cloud computing demonstrate the sector's exponential expansion. It was estimated at only $24.65 billion in 2010, but it has now reached the $150 billion threshold. Check out the following statistics:
- 81% of businesses have already planned out or are currently developing a multi-cloud strategy.
- Cloud computing powers 67% of enterprise infrastructure.
- Additionally, the cloud will host 82% of the workload.
- As a result, cloud computers and networks will be handling more than 40 zettabytes of data.
- By 2026, Platform as a Service (PaaS) will grow at a compound annual growth rate of 19.6%.
How does Cloud Computing empower Digital Transformation?
- Unmatched Accessibility
There is no denying that businesses are becoming more interested in applications. Applications are essential to business users due to their many advantages, including effective operations, less manual processes, and a faster return on investment. The enterprise information technology systems of an organisation increasingly depend on specific programs like Adobe, Salesforce, AWS, Google Workspace, Microsoft 365, etc.
The requirement to manage the integration of numerous apps is increasing as application adoption quickens. These programs must function and be able to communicate with one another for businesses. It is essential to enable a highly linked IT environment, which is unattainable without the cloud. With the unparalleled accessibility of cloud technologies, businesses are fast turning to APIs and system integration platforms that offer hybrid solutions (on-premises and cloud).
- Enhanced Security
Organizations are, in a way, modern data repositories. Data is the foundation for all digital transformation projects, which comprises of adopting RPA in order to automate manual operations and eventually develope AI and ML models on current datasets to create intelligent systems. Security is the most important factor for projects involving digital transformation. Organizations must protect difficult cloud environments as they increasingly rely on the cloud for their data projects.
On a sector level, cloud and network service providers are consistently making progress in securing the cloud. Organizations need to move beyond the limitations of the current cloud security architecture especially it comes to enhancing security for Digital Transformation programs, whether they are cloud-based or on-premises.
Many CIOs' initiatives for the digital transformation still have diminishing returns on investment ratios. Various technologies, apps, and a combination of contract workers, in-house technical teams, and digital service providers are commonly used by modern IT departments to operate, adding to the rising IT spending. Moving to the cloud is not a cheap endeavour. Although it is a business outcome-driven project, organizations gain from cloud pricing models. This is because they offer more staff productivity, quicker time to market, and chances for innovation.
- High Scalability
Scalability refers to the ability of a system or program to handle dynamically increasing loads. Virtual machines can be created in response to business needs thanks to the virtualization principle that underlies how the cloud functions. Virtual machines are very adaptable and are capable of handling a growing number of workloads and applications as needed.
Scaling can be done horizontally and vertically with cloud infrastructure. In the scenario that a platform has to expand, vertical scaling enables the addition of storage or processing power. This increases the system's ability to store and process more data. Horizontal scaling enables the addition of extra servers to the existing systems by dispersing workloads among virtual machines, ensuring that enterprises have the highest possible uptime and improved performance.
The most desired quality of programs for digital transformation is scalability. Dynamically scalable programs change to meet shifting customer needs without compromising on speed or quality of delivery. The ability of an organisation to scale is improved by the cloud. This eventually gives a boost to the operational effectiveness of IT departments.
Cloud elasticity is the capacity to expand and contract in response to demands. Based on changing usage requirements, this covers memory, CPU, and storage requirements.
Organizations are often concerned about cloud costs. The costs could spiral out of control if they are not kept under control. According to a survey by Business Wire, more than 77% of the organizations were taken aback by how much more expensive the cloud is becoming for them. Additionally, they think it is a waste of time and money to have engineers track cloud prices. Without a question, cloud usage as a whole is rising, but cloud waste is also increasing tremendously.
Strategies for digital transformation must take into account budgetary restrictions and keep track of unforeseen costs. Without cloud elasticity, businesses will end up shelling out more money than anticipated or even necessary. Even though there are manual methods for expanding and contracting cloud resources, companies must invest in ArtificiaI Intelligence-Machine Learning powered cloud monitoring tools to determine whether additional storage or computing capacity may be turned off.
- Automation Possibilities
Cloud computing offers tremendous opportunities for automation when compared to the outdated approach of on-premises servers. These largely depended on human processes. Establishing Infrastructure as Code procedures, version control for workflows, automatic backups, managing Security Controls through user access, and the Platform as a Service paradigm are all made simpler by the cloud.
Plans for digital transformation are dependent on how strategically sound cloud transformation is. It might be difficult for organizations to take advantage of new prospects with a traditional infrastructure. The cloud serves as the catalyst for all new business opportunities, whether organizations are expanding their healthcare infrastructure, providing customers with new material to stream, using robots in their warehouses, or opening their next cloud quick-service restaurants.
The cloud computing approach creates cost savings and innovation possibilities by extending goods and services to everyone and everywhere, building highly resilient business models, and integrating modern and legacy systems.