An all-out price war is coming to the cloud, according to the Wall Street Journal. Big cloud providers are slashing the cost of public clouds, while the price of private and hybrid solutions are coming down owing to technology improvements like higher server cabinet densities and storage alternatives such as colocation. But what contributions does the cloud really make to business growth?
Rent vs. Own
Most companies don't own their office space, but rather rent from a management company. Why? Because when there's a plumbing or heating issue it's the management firm's responsibility. And if your business suddenly needs more space, it's simple to terminate a lease - selling and buying real estate is not always so clear-cut.
The cloud offers a similarly streamlined path to business growth. Rather than purchasing expensive software packages and then dealing with massive desktop installations, cloud services let companies rent the software they need and run it entirely off-site. This means no bloated hard drives, no expensive upgrades and no downtime if you decide to switch office suites, CRMs or ERPs. The same is true for servers; on-premises cabinets require costly maintenance and upgrading at the end of their lifecycle, while renting cloud resources absolves companies of this responsibility.
Bottom line? The speed of tech development makes renting a better long-term investment than owning.
Up, Not Out
Cloud computing also contributes to business growth by offering an easy way up. Need more storage space or room for app development? Building out by adding local server after local server can quickly max out your power consumption and available space, while building up in the cloud carries costs for only what you use. Speed is also a factor in scaling up - there's virtually no delay between requesting new resources from a cloud provider and receiving them, while adding a new cabinet to your server room requires downtime, impacting the workflow of all users.
Together, but Separate
Another possible growth opportunity? Colocation. Many companies now see the benefit of cloud computing but aren't comfortable trusting total server maintenance and upgrading to a provider. Colocation has emerged as a best of both worlds option, allowing businesses to purchase and install the hardware they want in a secure, third-party facility. The colocation provider takes care of network connections - many are carrier-neutral - along with physical security. No one touches your cabinets without your permission, meaning you have total control and the benefits of a cloud-based network. While more expensive than pure public cloud computing, colocation makes it possible to maximize the use of local space without giving up server control.
Turn up the Volume
Any discussion of business growth and the cloud must directly address public offerings. According to Innovation Insights the big players - Amazon, Microsoft and Google - serve such large markets that they can slash prices to almost nothing in hopes of creating long-term customers. For businesses considering the cloud, this has two advantages. First is the obvious: price. While public clouds can't boast the same security or control as private alternatives, the sheer access to resources is unmatched, and currently at an all-time high value compared to price. There's a secondary effect as well: with the big three fighting so hard over public space, it's opened the door for smaller cloud service providers (CSPs) to offer reasonably priced private and hybrid alternatives.
The Hive Mind
As described by Inc., cloud computing can also spur business growth through the development of hives. These are businesses that have flexible staff levels and employees working across multiple locations because they're able to collaborate using the cloud. The result? Lowered operational costs and greater ability to meet tight deadlines or capitalize on sudden opportunities.
Does the cloud contribute to business growth? Absolutely. Companies can save money by renting rather than owning servers and software, and by scaling up rather than out when it's time to upgrade. Colocation offers an ideal balance of power and control, while large-volume public providers help save money and also pave the way for niche market alternatives. Finally, the cloud can drive business growth by fundamentally changing the way employees interact and collaborate.
David
