Cloud computing has only become more popular among businesses in recent years as industry leaders gain a more complete understanding of how the technology works and the organizational benefits its usage can bring about. As of 2019, an estimated 90% of businesses around the world are “on the cloud,” according to a Bright Talk webinar, while it is predicted that cloud data centers will be responsible for processing 94% of overall workloads, per Cisco.
Despite the reportedly “massive” widespread adoption of cloud-based services – the most popular being Software-as-a-Service products, which are used by 89% of companies, according to statistics compiled by Hosting Tribunal – experts recommend that businesses looking to move into the practice do so once they have considered whether the change is worth the investment.
Considering the facts about global cloud computing among businesses
At the beginning of 2019, an IDC global cloud spending forecast reported that the three industries that planned to invest the most in cloud computing services globally were those in manufacturing ($19.7 billion), professional services ($18.1 billion) and banking ($16.7 billion); in 2018, the industries’ combined spending accounted for a third of global cloud expenditures.
For cloud service providers, Software as a Service sales have become a major financial driving force; according to a September 2018 Gartner report, expected 2019 SaaS revenue is around $85.1 billion, yet in 2021 the market is predicted to be the top earning cloud service and bring in over $113 billion in revenue. One example of a popular SaaS application is Google’s G Suite, which contains a variety of programs similar to those offered as a part of Microsoft Office.
When it comes to considering the adoption of cloud services, businesses usually do so as a solution to a variety of needs, according to statistics compiled by Tech Jury in September 2018. The results showed that 84% of enterprises using cloud services have a “multi-cloud strategy” that uses more than one type, product or brand. Depending on the size of a business, the level of use for one or more cloud service types can differ greatly; variations currently available are public (available to a wider customer based and delivered across the internet) and private (available as specialized internal service for a single organization).
A majority of global businesses rely on what is known as a hybrid cloud service setup that uses both public and private options for different aspects of operations. According to data garnered for a Right Scale (now owned by Flexera) 2019 State of the Cloud report, hybrid cloud configurations are used by 58% of businesses. Due to their ability to handle the higher costs associated with usage, larger business enterprises generally run more of their workloads on private cloud services compared to their use of the relatively cheaper option. With small-to-medium-sized businesses, the dynamic is flipped, with a heavier reliance on public services; still, statistics show that public cloud adoption is growing at a rate three times faster than the alternative.
The benefits of a cloud-based software solution
Enterprises of all sizes can certainly benefit from the implementation of a cloud-based software solution, especially with the variety of SaaS options available today for different uses. According to Sys Group, most businesses cited that the “main driver” for their adoption of cloud services is the fact that the products allow for the ability to access data from anywhere. This is in response to an increasing trend among businesses whose employees often work remotely on-site or from home, which requires that workplace information be easily accessible and through secure means.
Compared to internal, on-premise IT network and software setups that bring with them their own set of benefits, cloud services have a cheaper initial cost. Despite their prices for added storage space to a cloud-based hard drive, costs typically decrease with larger workloads. While cloud services can be set up much more quickly due to a lack of installation, they save IT departments further time, and even resources because they are updated and maintained by their vendors themselves.
Reasons not to use SaaS as a solution
Not all businesses may find that a cloud-based software solution is the answer, as they can present issues that may be deemed less worthwhile than investing in an on-premise alternative. One main consideration is the regularity of costs. According to Scale Focus, an on-premise solution is typically a capital expense subject to depreciation (which includes costs for repairs, downtime and other issues), while a subscription to a cloud service is a regularly recurring operational cost.
While cloud software options have become ever more specialized for specific industry applications in recent years, some businesses have not yet upgraded their own existing systems to be able to use them in the first place. Businesses that do not have a strong and reliable internet connection or security measures in place are advised not to adopt cloud-based software services until they have allowed their systems to catch up with the technology. Certain businesses may choose not to lift their operations into the cloud due to data privacy concerns raised with major social media platforms’ reported sharing and sale of user information to advertisers.