Why the world's top companies have become so reliant on the cloud

It's flexible, secure, and cost effective

What do General Mills, PricewaterhouseCoopers, and Best Buy have in common? For one, they're all using the cloud.

And they're certainly not the only top companies doing so.

A January 2017 State of the Cloud Survey by software seller RightScale found that companies are now running 79 percent of their workloads on some form of the cloud. Another recent survey by business consulting company Frost & Sullivan suggests that percentage will only grow, as 80 percent of U.S. companies are planning to increase their usage of the cloud.

So, why are all the world's top companies flocking to the cloud?

1. It's more cost effective in the long run.

There are no upfront investments when it comes to cloud computing. Instead, companies enjoy a pay-as you-go subscription model, based on how much data is used.

Cloud computing also lets companies avoid spending as much on IT operating costs, licensing fees, equipment, and, of course, data storage. Without all of that equipment running and with the ability to scale server capacities up or down as necessary, companies can also reduce their power costs.

On top of all that, the cloud offers automatic software updates, saving companies time and money on the maintenance front.

2. It allows for far more flexibility and collaboration.

Information stored on the cloud is available anywhere, so long as there's an internet connection. That means employees can work from anywhere, while still collaborating with their teammates. Cloud computing's file-sharing apps make it possible for teams to update and share documents in real time — an especially important feature in an increasingly global marketplace.

3. It's more secure than traditional IT systems.

The prospect of handing off your data to remote servers that are often owned by outside companies may sound like a cybersecurity nightmare, but in actuality the cloud is generally safer than traditional servers. The New York Times reported that "none of the most catastrophic hacks have been on the big public clouds," and offered a helpful analogy to explain why this may be:

The same way that your money is probably safer mixed up with other people's money in a bank vault than it is sitting alone in your dresser drawer, your data may actually be safer in the cloud: It's got more protection from bad guys.

In the case of the big public clouds, the protection is the work of some of the world's best computer scientists, hired out of places like the National Security Agency and Stanford University to think hard about security, data encryption, and the latest online fraud. [The New York Times]

4. It offers disaster recovery.

The cloud can make a company data disaster a lot less disastrous. The cloud automatically backs up data off-site, where it will be safer in the face of a systems failure or another such disaster.

This means that if disaster strikes, the cloud will have all the company's data right there and ready to go. This significantly cuts down recovery times, which in turn slashes costs associated with downtime during a recovery effort.

5. It provides business insights — and a competitive edge.

The cloud gives companies access to some of the most innovative technology. Because of the baked-in flexibility, companies can more easily scale services to fit their needs without being dragged down by the rigidity of traditional infrastructures. The real-time information sharing capabilities of the cloud make it possible for companies to deliver projects quicker and cheaper.

With the cloud, software integration occurs almost automatically. The integrated cloud analytics offered by some cloud-based storage solutions can be particularly useful, as it provides companies an overview of their data. These insights can increase efficiency, in turn cutting costs. SalesForce reported that cloud-based insights enabled Sunny Delight to "increase profits by about $2 million a year and cut $195,000 in staffing costs."

That isn't to say there aren't any downsides to the cloud. As with any technology that's growing and evolving, there are bound to be some glitches along the way. But if Fortune 500 companies' increasing reliance on cloud computing is any indication, the cloud has nowhere to go but up.


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