What are the benefits of cloud computing?

The benefits of cloud computing are far-reaching. Here, we break them down into 3 main categories:

• Flexibility: Users can scale services to fit their needs, customize applications and access cloud services from anywhere with an internet connection.

• Efficiency: Enterprise users can get applications to market quickly without worrying about underlying infrastructure costs or maintenance.

• Strategic value: Cloud services give enterprises a competitive advantage by providing the most innovative technology available.

Today, cloud computing is omnipresent, continuously transforming how individuals and organizations—from small startups to large enterprises—operate. Businesses rely on cloud computing to enable remote work and harness innovative technologies such as artificial intelligence (AI), machine learning (ML) and edge computing.

Cloud computing infrastructure relies on a network of remote data centers, servers and storage systems owned and operated by a third-party cloud service provider (CSP), such as Amazon Web Services (AWS), Google Cloud Platform, Microsoft Azure and IBM Cloud®.

There are 4 main cloud delivery models:

• Public cloud

• Private cloud

• Hybrid cloud

• Hybrid multicloud

In this model, computing resources such as ready-to-use software applications, virtual machines (VMs), infrastructure and development platforms are made available from a third-party provider over the public internet. An IDC study forecasts that worldwide spending on public cloud services will reach USD 805 billion in 2024 and double in size by 2028.¹

The 4 most popular types of cloud computing services are infrastructure as a service (IaaS), platform as a service (PaaS), software as a service (SaaS) and serverless. Most enterprise organizations use a combination of all 4 as part of their cloud delivery stack:

• Infrastructure as a service (IaaS): On-demand access for computing, storage space and networking resources.

• Platform as a service (PaaS): On-demand access for developing, running and managing applications.

• Software as a service (SaaS): On-demand access to ready-to-use, cloud-hosted application software.

• Serverless computing: An application development and execution model that allows developers to build and run application code without provisioning or managing servers or back-end infrastructure.

A private cloud environment exclusively dedicates all hardware and software resources to 1 client. Enterprises that need to meet strict regulatory standards or handle sensitive data (for example, financial institutions, healthcare providers) often choose private cloud settings.

This cloud computing architecture combines public cloud, private cloud and on-premises infrastructure to create a single IT infrastructure. Organizations favor hybrid cloud for its agility, which allows them to respond to change and capture growth opportunities by rapidly provisioning computer resources.

A hybrid multicloud integrates multiple cloud services from more than 1 provider within the same IT infrastructure. This architecture offers businesses the flexibility to create the best of both cloud computing worlds for migrating, building and optimizing applications across multiple clouds.

The modern hybrid multicloud ecosystem enables cloud-native application development (for example, microservices) and uses an open source container orchestration platform like Kubernetes to automate the deployment of apps across on-premises data centers, public cloud, private cloud and edge settings.

Flexibility refers to how quickly a product or service can adapt to changing needs and environments. Flexibility encompasses the following advantages of cloud computing:

• Scalability

• Storage options

• Control

• Advanced security features

Cloud infrastructure scales on demand to support fluctuating workloads. For instance, cloud providers can dynamically adjust bandwidth based on real-time usage, automatically scaling up when customer demand spikes (for example, flash sales) and scaling down when traffic drops.

Users can choose public, private or hybrid cloud storage options depending on data storage, security and other needs. For example, data backup and disaster recovery (BDR) services allow businesses to copy and store data on a remote server to protect it from outages or damage. BDR helps companies to recover from data corruption, malware attacks and other disasters to help ensure business continuity.

Organizations can determine their level of control with as-a-service options. Beyond SaaS, PaaS and IaaS, organizations can further customize their cloud-based services with platforms like integration platform as a service (iPaaS).

iPaaS is a suite of cloud-based tools used to integrate data from multiple applications that are hosted in different IT environments. iPaaS helps enterprises address the SaaS sprawl.

Today, cloud providers offer robust cloud security features, such as specialized software to protect and secure data, applications and infrastructure. These offerings include virtual private cloud (VPC), application programming interface (API) keys, security information and event management (SIEM) and more.

Efficiency in the cloud refers to the ability to use cloud resources in the most optimal way to reduce costs, minimize waste and maximize operational outcomes. Efficiency covers the following advantages of cloud computing:

• Accessibility

• Speed to market

• Data security

• Cost savings

• Pay structure

A cloud global network of locations makes cloud-based applications and data accessible from virtually any internet-connected device. This benefit allows businesses to deploy workloads to the location nearest to their customers with low-latency connectivity.

Cloud platforms provide readily available infrastructure, which enables rapid app development and deployment without the need to manage physical hardware. DevOps and other IT teams can quickly test, iterate and start new products and services. This allows organizations to get their applications to market rapidly.

In the cloud, networked backups help prevent data loss from hardware failures. Data security in the cloud allows organizations to centrally manage and protect sensitive information across a distributed network. Cloud platforms offer advanced security measures such as encryption and threat monitoring, which help minimize the risk of data breaches while ensuring compliance with industry regulations.

Cloud computing uses remote resources, thus reducing an organization’s data footprint. This benefit reduces the cost of purchasing, maintaining and upgrading servers and other equipment.

Most major cloud providers offer a "utility" cost structure, which means users only pay for the resources they use. Pay-as-you-go pricing offers customers control with no long-term contracts or commitments.

According to an IBM Institute for Business Value study, the value derived from a full hybrid multicloud platform technology and operating model at scale is 2-and-a-half times the value derived from a single-platform, single-cloud vendor approach. Strategic value advantages of cloud computing include the following:

• Enhanced productivity

• Regular updates

• Team collaboration

• Competitive edge

• Sustainability

Cloud service providers manage underlying infrastructure, enabling organizations to focus on application development and other priorities. Cloud automation tools like dashboards for real-time statistics and AI-driven data analytics help reduce manual tasks and other administration burdens.

Cloud service providers regularly update offerings to give users access to the latest upgrades and technologies, such as generative AI and quantum computing.

Worldwide access means that teams can collaborate remotely across widespread locations.

Organizations can move more nimbly than competitors who are behind in their cloud migration journeys and must devote IT resources to managing infrastructure.

Cloud services help companies reduce their carbon footprint by using renewable energy sources, optimizing space usage and using advanced cooling technologies.

When adopting cloud technologies and practices, organizations should consider the following to help realize the full benefits of cloud:

• Evaluate existing systems and workloads

• Choose a provider

• Assess security needs

• Manage cloud costs

A cloud strategy starts with analyzing existing in-house systems, applications and workforce skills. Identify workloads and determine where to locate them, whether in a private or public cloud setting.

Outline business use cases. For instance, a healthcare company might need a private cloud setting to store sensitive customer data and a public cloud for testing new mobile apps for customer service.

Look to providers who can offer the services you will need as your cloud environment evolves. Seek out solutions that can integrate well with other providers' platforms if you need to allocate different hybrid cloud contracts in a multicloud environment.

Carefully review cloud service level agreements (SLAs)—contracts between a service provider and a customer that define the service and the expected performance level. SLAs are designed to meet customer expectations, hold CSPs accountable and help optimize the end-user experience. Review conditions and guarantees concerning latency, data availability, system uptime and unplanned downtime.

Cloud security is a shared responsibility between the provider and the client. In this model, cloud providers follow best security practices and take active steps to protect the integrity of their servers. For example, in a PaaS model, the client is responsible for securing the applications, the workload and the data; the provider is responsible for managing and securing the platform. Implement a zero-trust security model that enforces security policies for each individual connection between users, devices, applications and data.

Monitoring metrics and comparing data when using multiple cloud vendors with different dashboards can result in cloud sprawl. CSPs offer cloud cost management tools to help you track bills, features and other configurations, enabling you to optimize costs.