The benefits of Cloud Computing and why everyone should know about it

Do you know what Cloud Computing is?

Cloud Computing is the delivery of computing services – including servers, storage, databases, networking, software, analytics and intelligence – over the Internet to deliver faster innovation, flexible resources and cost-effectiveness solutions.

Within this range of services, there are various uses of cloud computing in business – the main ones being cloud storage, cloud backup, software as a service and cloud hosting.

I recently participated in a panel as an ambassador for Oi Solu??es with Rodrigo Abreu, CEO of Oi, on this topic and I can say with conviction that all these uses of the Cloud, if well defined by companies, can mean an advance for any type of business that is willing to invest in this type of technological solution.

But how?

Cloud Computing can provide companies with a cost-effective way to increase and accelerate their scalability or provide cybersecurity. Plus, companies only pay for the cloud services they use, helping to lower their operating costs, run their infrastructure more efficiently, and scale as their business needs change.

Despite the clear benefits that involve increased process efficiency and cost savings, organizations are still far from seeing the cloud as an indispensable arm in business since, according to a McKinsey report, only 13% of the Boards of organizations between Private, public and nonprofit companies have this topic on the Board's agenda, and looking only at private companies, this number only rises to 27%.

That is, an extremely low number if we consider the range of advantages that the Cloud has to offer.

The truth is that, as long as companies continue to see the Cloud Computing service as a technical issue, we would be limiting the understanding of its potential.

Therefore, I insist on paying more and more attention to a migration from on-premises to the Cloud and I list here the main factors that contribute to this theory:

- Agility

- Competitive advantage

- Opportunity to enter new markets faster.

As highlighted by the 麦肯锡 publication, "The cloud will help organizations reduce IT costs and support innovation through powerful emerging technologies. By democratizing access to computing power and infrastructure, organizations and industries that were previously not highly competitive from a digital technology perspective, or who face high barriers to entry and upfront costs, could use the resources to reshape their products and competitive landscapes."

The Cloud also brings specific challenges that must be considered and resolved through a strategic discussion, which goes beyond the volume of investments. Some of them being the following:

- Talents: focus must not only be on talent acquisition, but also on significant investment, planning and mindset change.

- Compliance and Security: customized prices and models, migration challenges, and compliance and security issues. The pandemic has exacerbated compliance and security issues due to the rapid deployment of cloud-based services in response to lockdown restrictions.

-New operational models and relevant business strategies: Even after the pandemic, the shared experiences of this period will establish the cloud as a strategic tool to provide an agile platform to develop faster solutions, without the need of capital expenditure (capex) for IT infrastructure.

What can we learn from how Cloud Computing is being used in the United States and European countries?

In fact, the positive correlation between the acceleration of digital channels in traditional businesses and the adoption and consumption of cloud computing is clear - something that was very strong in the world during the pandemic, particularly in Brazil - but that was already stronger in the United States, even before the pandemic in digital channels such as ecommerce for example. In parallel, Europe is sometimes less early-adopter in the adoption of advanced technologies such as the cloud.

The increase of telemedicine, supermarket e-commerce, marketplaces, and so on, forced by the pandemic, has accelerated investments in the United States as well.

The US is by far the leader in cloud adoption, with investments in excess of U$D200 billion, which is 6 times the volume of China. This doesn't even compare to the investments of the biggest countries in Europe, like the UK and Germany.

The reality is that Cloud Computing has accelerated too much during the pandemic: Gartner data points out that in 2021 cloud-computing spending in the world increased by 18.4%, something that shows us that there is still a lot of room to grow.

This brings us to an important point, which I even discussed in a recent panel in New York about migration from on-premises to cloud in traditional companies. Truth be told: even though it is already well established in the United States, we still see many opportunities for growth in the Cloud, but at the same time some challenges:

A recent Flexera study points out that organizations have difficulty controlling scaling up investments, and are over budget by 13% on average, as well as wasted spending (with 32% of investments considered wasted).

What does of all this tells us about the Cloud?

Fundamentally, Cloud Computing can, and will, reshape the way in which applications from all departments of a company are hosted, and run accordingly, basically as a "new electricity" of modern times.

So we need to look up to more mature regions like the US for learnings on what are some of the challenges that will come with the cloud adoption increase that is happening today.