Why cloud platforms are so important for the digital transformation

Network cloud

These days, everyone is talking about the cloud and cloud computing. While this technology is not the only important digital technology, it is a key gateway to other technologies, including artificial intelligence, the Internet of Things (IoT) and blockchain. The cloud is considered to be the linchpin of the digital transformation. But what exactly are we talking about, and what benefits are associated with the use of cloud services?

What does “cloud” actually mean?

In structural drawings of networks, technology specialists began to use the term “cloud” to refer to systems that were part of their own network but operated externally. The structure and function of these external systems was irrelevant to their own network. Today, files can be stored in a location whose precise function and structure is also irrelevant, and this is again referred to as the cloud.
From cloud to cloud computing

Now that we have found an answer to the question “What is the cloud?”, we immediately encounter the next question: How exactly does the cloud work, and what services are offered via the cloud? The basic principle can be explained in this manner: A cloud provider makes its servers available to clients in the form of a virtual data centre, the cloud. This requires that many servers be interconnected so that data is no longer stored on just one server. The client can access and use IT infrastructure such as storage space, computing power and application software through these servers. Providing IT services via a network of servers is referred to as cloud computing. With this model, it is no longer necessary to install the IT infrastructure on a local computer. You can access the data online from any location – all you need is Internet access.

The primary advantage of cloud computing is that standardised services can be offered faster and at a lower price than many companies would be able to do themselves using their internal IT resources. Cloud providers are able to do this by employing a high degree of automation of their data centres as well as by utilising their resources optimally through a heterogeneous and globally distributed user community. Pricing that encourages off-peak use of services is also a component of the business model. The client saves on procurement and operating costs and only needs to pay for what they actually use.

What cloud computing services are available?

The range of services offered in the context of cloud computing corresponds to the entire spectrum of information technology, including infrastructure, platforms and software.

SaaS, PaaS, IaaS infographic

(Image source: https://azure.microsoft.com)

Software-as-a-Service

With Software-as-a-Service, software applications are made available on demand via an Internet connection. Users usually access the software using a browser. The client pays a usage fee for use and operation of the cloud resources. The SaaS model saves the client some of the procurement and operating costs, as the cloud provider takes responsibility for all IT administration and other services, including maintenance and updates. To this end, the IT infrastructure, including all administrative tasks, is outsourced, allowing the client to concentrate on their core business.

Platform-as-a-Service

Platform-as-a-Service (PaaS) is the term used to describe a cloud environment that provides a platform for developers of web applications on the Internet. Since the infrastructure is in the cloud, the client doesn’t need to worry about setting up and maintaining servers in order to apply patches, upgrade software, implement authentication and so on. There is also no need to purchase hardware or software. The Platform-as-a-Service is equipped with everything needed for the development of new software.

Infrastructure-as-a-Service

With the Infrastructure-as-a-Service (IaaS) model, basic IT resources such as computing power, storage space and network capacities; communication devices such as routers, switches and firewalls; and systems for archiving and backing up data are provided. The user has control over operating systems and applications. They usually have to compile the infrastructure themselves from the required computing instances and storage.

How far along is Germany in the cloud transformation?

According to a survey by American software provider Citrix, Germany is in the lower midfield of European countries when it comes to use of the cloud. Only 44.7 per cent of German companies store more than half of their data in the cloud. In contrast, 62.7 per cent of companies also (or even exclusively) use on-site data and applications – that is, they store and host these resources locally. On the other hand, 60.2 per cent of companies in the Netherlands already store a majority of their data in the cloud, and in France the figure is 51.4 per cent. Only in Great Britain is the figure lower than in Germany, at 37.6 per cent.

At the same time, a majority of the companies surveyed describe the cloud as important for their business and continue to invest in the cloud. According to the survey, 8 out of 10 participating German companies claim to already have a cloud strategy in place (78.1 per cent), with such strategies being specified in varying degrees of detail. However, security concerns also exist, with a considerable proportion of German IT decision-makers (3 out of 10) doubting that public cloud infrastructures are suitable for securely storing and processing sensitive business data (30.2 per cent).

The cloud lock-in effect

Some managers also express concern about vendor lock-in, in this case being locked into the respective cloud provider. If you thought vendor lock-in was a thing of the past due to the existence of open-source software and cloud solutions, the reality of the cloud era will disabuse you of this notion. There is a risk today that companies will become dependent on their cloud providers due to the particular programming interfaces and services in use. Such lock-ins are to be avoided. While there is little difference between the providers of IaaS components, when choosing specific interfaces and services, you should carefully consider whether there might be an open alternative that grants as much flexibility as possible to the company.

 

Top five cloud platform providers worldwide

Bar chart of cloud providers worldwide

(Source: RightScale 2018 State of the Cloud Report)

Digital transformation as an opportunity for businesses

The digital transformation in both the social and economic realms will be the key issue for businesses in the years to come. The transition to digital solutions and processes requires sophisticated and functional solutions that are geared to the individual needs of each enterprise. After a company’s needs are thoroughly analysed, a cloud model such as SaaS, PaaS or IaaS can help to foster the digital transformation of the business on a lasting basis.

Seven questions companies should ask themselves about the cloud

  1. Can the cloud provider meet all the needs of the business activity?
  2. Has cloud computing been taken into consideration in the strategic process from both the business and IT perspective?
  3. Is the rollout and changeover to cloud services worthwhile financially (when the investment is compared to the benefits)?
  4. Do the cloud services take into account the (data) security rules defined by the enterprise?
  5. Have proper security measures been taken, such as establishment of failover data centres?
  6. In which country is the service provider headquartered, and where does it host its data centres?
  7. Does the cloud provider offer support in implementing your solution?

 

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