Where is the cloud taking us – and what does it mean for businesses?

What is the cloud? And why is it important for your business? Well, that is what we will try to explain in this piece. But don't worry, no technical expertise is required.

The cloud is not a technology in itself. It is simply a different way to buy it instead of buying your own technology and keeping it inside your company, you have it somewhere else (inside Amazon or Microsoft, for instance) and only pay for what you use. It consists of big boxes – called servers that store and process data.

Our phones are a type of server. They consist of software and hardware that give them three key things: processing power that is, how much information can be processed; storage capacity how much data can be saved (e.g., contacts, photos, etc.); and processing speed the speed at which information can be processed. All of this is contained in the physical shell that is our phone. With the cloud however, we're talking about huge servers that can contain tons and tons of storage, with tremendous processing power and speed. That means that they need to be a whole lot bigger than our phones hence, the big boxes.

Before the cloud, companies had their own big boxes, either stored in their own offices or data centers (which are basically huge sheds with a ton of big boxes). This meant either employing IT people or hiring an IT company to operate and take care of the servers, which was expensive and time-consuming, not to mention maintaining the space to store them. Now, cloud providers can handle all the maintenance and storage of the servers, enabling both businesses and consumers to rent the server capacity that they need, when they need it.

So, what does this mean for businesses? First, if you don't own the servers, you don't have to worry about their high upfront purchase cost, maintenance, or management efforts. This gives businesses a lot more freedom to focus on their core business and let the cloud provider worry about the infrastructure. It also means that you can adapt the rented capacity to your customers' needs. The pandemic is the most recent example that led to increasing customer demand in many industries. Zé delivery, a Brazilian online beverage delivery service, was able to increase its monthly orders from 20,000 to 350,000 in 2019 as a result of its expanded use of the cloud; while Sayurbox, an Indonesian online fresh food delivery service, supported a 300% increase in daily orders in the same year (both through Amazon Web Services). Ultimately, the cloud enables businesses to innovate better and faster  with access to state-of-the-art technology at affordable prices and an environment that promotes quick and easy experimentation and iteration. Without being tied to long-term contracts and investments, it is also a lot less risky for companies to try new things.

However, the true potential of the cloud and the benefits we have mentioned can only be achieved with a thorough digitalization strategy in place. Rather than adopting the cloud as an isolated technology or initiative, it should be a part of the broader, long-term business goals and to be incorporated properly with processes' and employees needs in mind. There are typically three key steps to take into consideration:

  1. IT and business environment assessment: assessing the current IT environment and, according to the business strategic goals, analyze what is needed in terms of skillset, technologies, and processes to get there. Have a clear timeline and consider different phases in which to implement assets.

  2. Cloud migration: Adopt the cloud in phases – first the applications that can easily be moved to the cloud;  the second phase would involve the ones that need some modifying but not major changes; and lastly, apps that need major changes or to be rebuilt from scratch. All of these should be done in parallel with operational (processes and employees) changes.
  3. Continuous optimization: With the cloud, the IT environment ceases to be a static one – it needs to be constantly monitored, updated, and modified. In fact, managing cloud costs
    is the biggest challenge businesses face today – according to the 2020 IDG Cloud Computing Survey, 40% of interviewees said controlling cloud costs was their number one challenge.

Another critical aspect has to do with data compliance and integrity, further enhanced by the general data protection regulation (gdpr) in the EU. Where is the cloud? That is, in which country are those big boxes located? In many cases, the data needs to be stored in the same country in which it originated. Cloud and security architects and system administrators need to work closely with cloud providers to ensure data is being stored and handled properly.

From working with leading cloud and telecom companies globally, we see that the cloud is a one-way ticket journey which will continue to have unprecedented implications for all businesses regardless of industry. If you want to know more about cloud and how to ensure your business and marketing strategies are aligned with your cloud journey, reach out to us.

Maiara Munhoz is a Senior Tech Strategist at Seventy Agency with 9 years experience from working with growth strategy and business design for leading global cloud and telecom companies.

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