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Cloud Computing for your business: what you need to know

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Cloud computing has been around since the concept of the internet started, but only in the past decade has it become a household time. Whenever we access a data-heavy platform like Gmail, Facebook or Outlook, we are accessing data in the cloud. The general public has been quicker to adopt the cloud than businesses mostly because of the sensitivity of business data.

The growth in business cloud adoption has been slower with an estimated 50% of global enterprises relying on the cloud in 2018 and this number only expected to grow.

Businesses are migrating to cloud at this increasing rate for a few reasons. Namely:

  • Security
  • Affordability
  • Scalability
  • Customization to business needs
  • Low risk of data loss
  • Immediate upgrade
  • Accessibility

While the benefits are well advertised by Cloud resellers and vendors, many businesses don’t know the different types of models of cloud computing and how each can work for their business. In this instance you get the following:

  • Infrastructure as a Service (IaaS): IaaS providers offer configured hardware and software through a virtual interface. Servers, storage, networking, and security features are the basic services IaaS provides.
  • Platform as a Service (PaaS): PaaS provides an environment that allows users to build internet applications and services, from simple apps to sophisticated enterprise applications. PaaS offers all the same services like IaaS, with an additional layer of middleware, development tools, business intelligence services and database management
  • Software as a Service (SaaS): Email, calendars, web conferencing tools, project tracking and office tools such as Microsoft Office 365 are all examples of SaaS services.
  • Disaster Recovery as a Service (DRaaS): DRaaS uses cloud resources to safeguard and protect applications from disruption and loss.

Knowing the above, how do you choose a cloud service for your business? As more IT systems are outsourced, choosing the right provider is critical for business growth.

  1. Develop a cloud strategy that is focused on what your business does and select a cloud provider based on this.
  2. Go for providers that offer SLA’s that can make your IT budget manageable and keep service fast and efficient.
  3. Check the security of the provider.
  4. Monitor their service – for your business goals to be achieved their service needs to be 100%, all the time.
Cloud Applications on Mobile Phone

How cloud applications are transforming IT

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Since the early 2000s software has evolved rapidly and these non-stop changes have greatly upset the balance of power in computing.

For something like a Content Management System (CMS) to be cloud-native, the entire system must exist in the cloud. It needs to be developed, tested, deployed, debugged and updated on the cloud. The system would not be installed on an on-premise server for permanent residency nor is it converted to a virtual machine image to make it available across servers. Systems like these are designed for the cloud, which requires fundamental changes to a business’s architecture and the IT economy that supports it.

A cloud-native application is made for the systems that host it, rather than having to be converted or staged in a virtual environment that hides the nature of the cloud from it. Since the beginning of computing, software has been designed for the machines destined to run it. Dartmouth’s John Kemeny and Thomas Kurtz essentially invented modern computing by devising a language meant to withstand trial-and-error programming: BASIC. The principle of BASIC is that software can make the best use of the machine it runs on and should be nurtured and developed inside said machines rather than compiled separately. Cloud-native computing uses the same principle, extended to include cloud platforms.

Since the start of software developers and high-level programming, software became less reliant on the hardware it needed to be designed for. Hardware is now designing itself for software and we can’t go back.

“The cloud” (which is way too late to rename) is a machine, notwithstanding one that spans the planet. A cloud may be any combination of resources, located anywhere on Earth, whose network connectivity enables them to function in concert as a single assembly of servers. A business could own its cloud in its entirety, or rely on the likes of Microsoft, Amazon, and Google to have a cloud-native environment, or use both it’s own and cloud suppliers “cloud”. So when we say an application is “native” to this type of cloud, what we mean is not only that it was constructed for deployment there, but that it is portable throughout any part of the space that this cloud encompasses.

A cloud-native application is designed for the cloud platform it is intended to run on. Its life is in this cloud platform. It changes the computing landscape for 2 reasons:

  • “Version” means something different than it did 10 years ago – anyone who knows Windows understands this. There probably won’t be a Windows 10 – but there was a Windows XP, Vista, 7, 8 and 8.1. all before 10. A true cloud-native application will evolve as smartphones do – you didn’t need to pay to update your Android from Oreo to Pie.
  • The is no clear reason as to why any application needs to be installed on a PC – except in instances of no connectivity

Soon the very phrase “cloud-native” may fall into disuse, like the tag on the 1990s and early 2000s TV shows that read, “Filmed in high definition!”

Cloud Business AWS

How was 2018 for the SaaS market?

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You might not know it but almost every business relies on SaaS (Software as a Service) to operate. According to Business Wire, the SaaS market is expected to grow at an annual rate of 21.2%. 2018 was a milestone year for SaaS as it saw a couple of SaaS companies go public. The cloud market drives the overall SaaS market because the cloud makes SaaS a reality. That is why this article includes cloud market statistics as well as SaaS statistics.

Cloud Driving the Bottom Line

Recently, Gartner forecasted a 17.3 % growth in the cloud market. Cloud system infrastructure services (the fastest growing segment of Infrastructure as a Service) is expected to grow by 27.6% in 2019. With this in mind, it is surprising to find that Amazon is not primarily an e-commerce platform anymore. Amazon has shifted its focus in recent years to its B2B service called Amazon Web Services (AWS). The total revenue contribution of AWS in the companies balance sheet amounted to $6.1 billion in 2018.

While AWS has a 41.5% market share in the public cloud, competitor, Microsoft Azure, is catching up. In their latest earnings report, Microsoft reported that Azure grew at 89% over the 2018 year. This is a growth rate almost double that of AWS.

Cloud Business AWS

The shift from On-Prem

Microsoft Azure currently shares 29.4 % of the market whilst Google has a minor 3%. Other players such as IBM and Rackspace make up the remaining 25% of the market.

Despite Azure’s growth, Amazon is still the preferred cloud platform with 80% of enterprises that are running or experimenting with AWS preferring it. Both Microsoft and Amazon had increased adoption rates, proving that enterprises and businesses are gradually shifting their data to the cloud. Possibly due to CIO’s and business leaders understanding the transformational aspect cloud computing has on their business.

Some examples of enterprises moving to the cloud include:

  • Capital One (an American Bank) hosts its mobile app on AWS
  • GE Oil & Gas is migrating most of its computing and storage capacity to the public cloud to reduce risk and optimize cost
  • Maersk is migrating legacy systems to the cloud to optimize processes whilst enabling business intelligence and AI to streamline its operations.

The biggest growth in SaaS yet

Microsoft leads the SaaS market with a 17% market share and an annual growth of 45%. The total enterprise SaaS market is presently generating $20 billion in quarterly revenue.

According to Synergy Research Group, Salesforce has majority market share when it comes to CRM. However, the CRM segment is growling relatively slowly in comparison to other segments.

If we look at SaaS based on industry verticals, majority of cloud adoption lives in the financial services industry with an adoption rate 19%, this is commendable when compared to other verticals such as insurance and healthcare. However, enterprise cloud adoption remains low at 20%.