When Does Cloud Computing Make Sense

By: Brian J. Stewart

Cloud StrategyCloud computing is the latest buzz word in the technology industry. Some argue cloud computing is nothing more than a fad that will fade like many of the companies in the ‘dot-com bubble’ era. They often cite concerns regarding security and existing infrastructure investments as their primary rationale. Others argue cloud computing is the future of computing and that it will eventually take over all of present day computing, making traditional software, servers and private data centers obsolete. As is often the case, the truth likely lies somewhere in between these two perspectives.

Cloud computing is here to stay and in many ways will be at the heart of future computing. It will revolutionize how enterprise applications and websites are built and delivered. It will reshape the user experience, leading to new products and services previously not feasible. It will lead to the creation of new devices and products with a level of connectedness that will change nearly all aspects of life. For businesses, cloud computing will provide significant benefits in terms of cost savings, scalability, flexibility, and opportunities for business process automation and integration.

Despite all of these significant capabilities and advantages, cloud computing will not replace all other present day computing. The processing power and storage capabilities in large corporate data centers is immense. There are valid reasons to continue to invest in onpremise hardware, software, and infrastructure. The key drivers for continued investment in onpremise infrastructure are connectivity reliability, bandwidth constraints, latency concerns, and regulations regarding security and privacy.

However, there are several use cases and scenarios where cloud computing is not only feasible, but very advantageous, including:

  1. Software as a Service (SaaS) – Solutions that provide specialized applications and services with global accessibility and always current technology

  2. Enterprise to enterprise integration when business processes span organizational boundaries and networks

  3. Disaster recovery and contingency planning to augment or replace existing backup and disaster recovery capabilities and plans

  4. Scalable data and content storage enabling virtually unlimited storing of information and data in the cloud for secure global accessibility

  5. Website hosting where scalability is needed or performance requirements are unknown

  6. Data crunching or processing services for data analytics and bulk data processing

  7. Small and medium businesses who need services and applications, but want to minimize invest capital in hardware, software, and IT Support Staffs

  8. Rapid development environment to launch new services

  9. Constant connectedness with Internet of Things (IoT) and mobile applications

Use Case 1: Software as a Service (SaaS)           

SaaSSoftware as a Service, or SaaS, is a trend where applications are delivered via the Internet on a subscription basis. SaaS applications are delivered through a paid subscription for commercial use and are often free for consumers. SaaS eliminates the need to maintain the infrastructure, manage the data, or patch and upgrade software. The users have the benefit of always using the current versions of technology and software without the costly maintenance of upgrades.

The most popular SaaS applications used by businesses are:

  • Messaging and Collaboration (i.e. Microsoft Office 365, Google Apps)

  • CRM (i.e. SalesForce)

  • Document Management (i.e. Google Apps, Microsoft Office 365, Veeva)

  • Document conversion services

The most popular SaaS applications for consumers are:

  • Messaging, Contact, and Calendar Management (i.e. Google’s Gmail, Microsoft’s Outlook.com, Yahoo! Mail)

  • Communications (i.e. Skype)

  • Music services (i.e. Amazon Music, Apple iTunes, Microsoft XBOX Music, Pandora, Spotify, )

  • Video services (i.e. Amazon, Apple iTunes, Netflix)

  • Cloud Storage (Amazon Cloud, Apple iCloud, DropBox, Google Drive, OneDrive)

  • Office Document (Google Docs, Microsoft Office Online)

These services run in the cloud and provide the benefit of being accessible from most smartphones, tablets, and traditional desktop/laptop computers. These services provide solutions that replace many legacy storage mechanisms such as CD’s, DVD’s, thumb drives, and hard drives.

Use Case 2: Enterprise to enterprise integration

Today, business processes are no longer constrained or limited by the boundaries of a single enterprise. Business processes often extend to business partners, customers, and vendors. This trend is fueled by globalization, specialization, and the accessibility and speed of the Internet. 

Cloud computing provides the opportunity to revolutionize and streamline business processes through the automation of the entire business process. For example, an order can be placed on Amazon.com, sent to a merchant for processing, tracking information provided back to Amazon and ultimately back to the customer. This often transparent to the user to who placed the order.

Enterprise application integrationCloud computing also provides the opportunity to automate processes by having triggers driven by machine events or people’s actions. For example, a machine could automatically alert a service maintenance company when threshold or error condition is encountered with equipment. This could be done by writing to a queue or leveraging business process automation (BPM) cloud solutions. This enables multiple organizations to react proactively to certain events. An order for a replacement part can be automatically generated with the parts shipped directly to the company and readily available onsite by the time the service technician arrives. In addition, the company operating the equipment can automatically switch production to another piece of equipment or potentially to an entirely different facility, ensuring production demands are met. Performance data and operational parameters stored in the cloud enable service maintenance providers to review data and diagnose and repair a problem remotely.  Leveraging cloud computing also enables equipment manufacturers to proactively market and upsell solutions based on real customer usage data and metrics. Through analytics, manufacturers have access to valuable data that can lead to product innovations and improvements.

The accessibility of information and data, business analytics, business intelligence, and real-time data communications ensures valuable information is available to all parties. It leads to product innovations and improvements, improved customer service, increased operational efficiencies and productivity, decreased downtime, and proactive capacity planning.

Use Case 3: Disaster recovery and contingency planning

Disaster recoveryFor an enterprise, traditionally disaster recovery and contingency planning required implementing complex backup systems and operating procedures to backup data and applications. It involved the prioritization of data and backup due to limited processing and storage resources. It also necessitated careful contingency planning and prioritization for restoring systems in the event of a disaster.

Cloud based backup solutions enable enterprises to pay only for what they use and provide enterprises with a secure offsite backup. Cloud based backup solutions are often more scalable, enabling an enterprise to mirror or backup, not only data, but also applications and services to the cloud. Many enterprise relational database systems also have integration with cloud based backup solutions to fully automate the process. These characteristics and features of cloud based backup solutions provide for dramatically improved business continuity in a disaster scenario.

Cloud based backup solutions also offer opportunities for significant cost savings. It eliminates the need for expensive redundant data centers and server availability. It enables organizations to pay for backup capacity on an as needed basis.

As well for consumers, there are several cloud based backup offerings, such as Carbonite, that provide many of the same benefits for companies. They are fully automated eliminating the need for consumers to worry about backup media, capacity, and offsite storage.

Use Case 4: Scalable data and content storage

Cloud StorageTraditionally business data is stored in relational databases (i.e. Oracle Database Server, Microsoft SQL Server), file shares (i.e. Network-attached Storage or NAS), and content repositories (i.e. EMC Documentum, Microsoft SharePoint). As the size of these databases, file shares, and repositories grow, so does the complexity of managing, securing, and backing up the data.

Cloud based storage offers virtually unlimited growth potential for data. Businesses pay only for what they use and need and they no longer need to be concerned with the complexities of managing and backing up data. This enables businesses to focus on applications and business processes and not on the difficulties of building and supporting a scalable storage infrastructure.

Amazon, Apple, DropBox, Google, and Microsoft offer cloud based storage solutions for consumers. These solutions offer consumers a secure place to store valuable documents, music, and videos. They also provide global accessibility from a wide range of devices. Similar to corporate cloud storage solutions, these companies handle the data backup and availability issues thus enabling consumers to focus on their lives and creating memories, rather than how to preserve their digital data.

Use Case 5: Website hosting where scalability is needed

Website hostingMany websites fail because of inadequate capacity and scalability planning – a data loss, sluggish performance, or a security breach for a new site can be catastrophic. These challenges damage a company’s reputation, brand, and erode customer trust. For a startup, this is often fatal. Traditionally planning for scalability was not only expensive in terms of hardware, software, and data communication pipes, but also in the expertise required to implement and support these systems.

Cloud based web hosting completely eliminates these complexities. New web instances and worker processes can be spawned automatically upon a demand and automatically winded down when no longer needed. This allows for computing and capacity elasticity for a website, but also allows for them to pay only for the resources as they are needed.

Cloud based web hosting creates an environment where new websites and services that were historically too expensive and risky are now possible. Cloud based hosting also enables businesses to focus on features, functions, and user experience without requiring to be concerned with the scalability of web servers, databases, and networking infrastructure. Businesses must still to be concerned with designing and writing scalable code, but need to spend less time and effort on infrastructure scalability.

Use Case 6: Data crunching or processing services

Data crunchingMany enterprise applications have requirements for CPU and memory intensive processing jobs or tasks. This can include business analytics and business intelligence, as well as content publishing, email notifications, and enterprise system integrations. These tasks are typically resource intensive and are scheduled or processed on demand based on a queue. Traditionally this required dedicated servers for data processing. During the time jobs or tasks are running, significant resources are needed, but then these servers often have significant periods of idle time. Cloud based offerings allow for these resource intensive tasks to be offloaded to the cloud. Worker processes can be spawned upon demand for processing and automatically shut down when no longer needed. This eliminates the costly infrastructure and support investments and enables enterprises to pay only for what they use. It also dramatically improves the flow and availability of data and information for decision makers.

Use Case 7: Applications and Infrastructure for small and medium businesses

Cloud computingTraditionally small and medium sized businesses need to invest significant capital on core infrastructure (i.e. file storage, identity management/authentication, computer management), communication services (such as email, instant messaging), and an IT Staff to support these systems.  Often these small and medium sized businesses are caught up in continually investing in support expertise and infrastructure to minimize the risk of running obsolete hardware and software. The risk of running obsolete software often puts organizations at a disadvantage leaving them vulnerable to security lapses, data loss, and loss of productivity.

With cloud computing, few small or medium sized businesses need a data center or even a single server. There are cloud offerings for the core infrastructure components such as identity management (user authentication), computer management, anti-virus management, and content storage.

Cloud based solutions also allow for organizations to dramatically reduce their IT Support Staff and ensures businesses can fully leverage the latest technology to improve security, reliability, and productivity. By running business applications and infrastructure services in the cloud, organizations are able to focus resources and capital on what strategically drives competitive advantage and marketplace differentiation. Cloud computing in essence removes the 'IT Distraction' and allows organizations to focus on their core business and enables them to scale more easily.

Larger organizations will likely find a hybrid solution with on premise, private clouds, and public clouds, which makes the most sense, at least in the foreseeable future. This is largely due to complexities with existing systems and data, as well as the vast number of in-house custom line of business (LOB) applications. Other considerations include data security and privacy, as well as network latency. Larger organizations will also benefit from investments in private clouds which generally require significant capital. These private clouds reduce network latency and secure data while still experiencing the same scalability and flexibility benefits of public clouds.

Use Case 8: Rapid development environment to launch new services

Conventionally when an entrepreneur or business wanted to launch a new product or service, it required significant capital investment to acquire, configure, and deploy the necessary infrastructure for the development environment. For complex systems and websites, this often required numerous servers, databases, and network load balancing components. In addition to the significant capital investment, it also required significant IT expertise, time, and resources to provision the developments and test environments. This slowed down the innovation process, as well as in many cases presented a critical financial hurdle and sometimes insurmountable obstacles for organizations to overcome.

Cloud computing allows for the rapid deployment of development and testing environments, often in minutes, rather than weeks or months. In addition, cloud computing also provides for a smooth transition to a pre-production and production environment.

Use Case 9: Constant connectedness with Internet of Things (IoT) and mobile applications

The next technology wave for consumers and corporations is Internet of Things (IoT) or the proliferation of devices that are connected to the internet. Garner estimates Internet of Things will grow to 26 billion units by 2020 [1]. All of these devices will work together to improve the productivity and efficiency of consumers and employees.  The glue for all of these devices will be cloud computing.

As an example, cloud computing will enable health monitors to capture and store information in the cloud empowering individuals to make healthier choices and measure progress on health milestones.

As another example, through IoT and cloud computing, equipment and appliances will realize significant improvements in quality, maintenance, and product advanced. IoT enables enterprises to gain tremendous business intelligence and insights into how customers use their products and services. It improves the level of service they can provide to their customers and leads to necessary product innovations and changes that consumers actually need and want.

There are also tangible benefits for IoT in the enterprise. IoT and cloud computing allows enterprises to gain tremendous business intelligence and insights into employees and the flow of goods and services through their value chain. For example, it improves employee productivity by allowing alerts to be generated when inventory levels drop behold thresholds without requiring the costly process of taking inventory. Also, it enables businesses to monitor their assets, raw materials, and finished goods in real-time. And furthermore it improves the life of equipment by ensuring necessary service and maintenance is completed timely.

Cloud computing makes all of this possible by providing the computing resources, information storage, business analytics, business intelligence, and data communication framework for a connected world. It is striking to look back on how the Internet has dramatically changed commerce over the past two decades, but that will pale in comparison to what cloud computing and IoT will bring to all industries, consumer and business products and services in the next decade.

Cloud Computing isn't a fad that will fade

Cloud computing isn’t a fad that will fade. It is real revolutionary technology trend that will have a significant impact on how software, websites, and services are developed and delivered. Cloud computing will revolutionize appliances, equipment, and devices and lead to significant innovations and new product and service categories that will improve people’s lives, health, productivity, and efficiency.

Cloud computing may eliminate data centers for smaller and medium sized businesses, although it will not render all data centers obsolete. Data centers and on premise servers and services, especially for larger organizations, will remain relevant and needed. However, cloud computing will still play an important role in computing for larger organizations.

Cloud computing shouldn’t be viewed or treated as the ‘end all’ for all computing problems and needs. The benefits and disadvantages should be carefully weighed. Like the old adage says, ‘too often when all you have is a hammer, everything looks like a nail.’

Related Article(s)

  1. Five Pillars of Cloud Computing
  2. Understanding Cloud Computing
  3. Defining an Effective Cloud Strategy


  1. Gartner. “Gartner Says the Internet of Things Installed Base Will Grow to 26 Billion Units By 2020” Gartner. December 12, 2013. http://www.gartner.com/newsroom/id/2636073.