Raw computing power and data storage is essential to modern organisations if they are to thrive in the data-driven world. However, the technology and infrastructure necessary to support this is growing ever more complex and, therefore, more expensive for small and medium enterprises.
Why do firms migrate to the cloud?
Cloud computing is basically the delivery of various computing services via the Internet, from file storage to complex artificial intelligence suites. Cloud computing services give a company the capabilities of a large enterprise without tonnes of hardware, additional personnel or sky-high overhead expenses.
- Better organisational performance. Many companies, particularly in the small and medium enterprises sphere, are attracted to the significant improvement that cloud computing can bring to their company. Cloud services can take over mundane tasks, allowing improved productivity in the existing workforce.
- Greater flexibility and agility. Most cloud computing suites can be customised according to an organisation’s needs. Additionally, there are plenty of standalone cloud computing services that can easily and quickly augment a company’s capabilities on demand.
- Affordable scalability. With growth comes increasing business and stakeholder expectations, and there’s no other way to address this other than scale up. Scaling up is very manageable in the cloud, as is scaling down if you need to cut back on the expense. It is more of a question of budget than practicality.
- Cost reduction. Imagine having all the computing power you need without all the necessary hardware and the associated maintenance costs. You only need to invest in the subscription to your cloud provider, which will be leagues cheaper than buying powerful computer hardware, developing custom software and paying for your system’s high maintenance costs.
The Con: Moving to the cloud takes organisational guts
Migrating to the cloud is never easy; some organisations even fail in this regard. According to a recent IHS Markit survey, around 74% of companies who have made the attempt to move to the cloud fall back to legacy systems.
This could be due to lack of staff buy-in: as the benefits of cloud computing rely heavily on automation, many employees feel the threat of losing their jobs. This makes the transition difficult, and will require leadership that can adapt to the challenge of reorganisation
According to Christian Espinosa, a leading entrepreneur in the field, moving to the cloud goes beyond simplifying processes and improving business operations.
“It can require a complete overhaul of an organisation, and leaders may need to reallocate tasks or even make the never-easy decision of laying off redundant personnel.”
Companies may need to take time before they may be able to adapt to the strange new world of cloud computing, adjusting their way of thinking to the cloud’s requirements and optimising their workforce during the transition. Otherwise, their investment might fail, and they backtrack to their old ways.