how the cloud works

How the Cloud Works and Which Paths Small and Medium Sized Businesses are Taking to Embrace It

On the timeline of technology, the cloud is one of the most intricate blends of ingenuity to date. In simple terms, cloud computing enables servers, networks, data storage systems, development tools, and applications via the Internet to deliver the services many businesses use every day.

(We discussed in a recent blog what cloud services deliver to small and medium businesses. The benefits range from Internet access itself to measured pay-as-you-go service, on-demand activation for new services, and rapid elasticity that makes your business more adaptable. Or think: Speed, Agility, and Integration.)

In the US small business realm in particular, the cloud outlook through year-end 2020 is that 78% of SMBs will have strategically adopted cloud computing as their IT infrastructure.

Compared to an SMB cloud usage rate of just 55% in mid-2019, it’s safe to say adoption of the cloud by small businesses is gaining traction… and will continue to.

So if your business hasn’t taken advantage of the cloud to this point, it should at least be a consideration. Especially now with Covid-19 continuing to disrupt how businesses must operate remotely, and with cloud continuing to redefine the modern workforce.

And if you are indeed looking to the cloud to improve your operations and business outcomes, here are some things to know about how the cloud works and the different paths to implementing it. 

Moving from on premise

Back to servers, data systems, development tools, networks and apps, “in the cloud” means these devices and services move from your office IT infrastructure to a datacenter. Microsoft, Amazon, Google and other cloud providers maintain data centers globally to support and offer services in localized regions worldwide.

Universally, a datacenter is a secure, climate-controlled facility that houses a redundant IT infrastructure. Redundancy in a datacenter is the process of duplicating copies of your business’s data, systems and equipment so you’ll have secure and immediate access to backed-up versions should your cloud service become corrupted or unavailable.

Power redundancy is similar. Because datacenter operations must run non-stop, facilities are designed and built with power resources and backup systems to withstand severe acts of nature and subsequent outages.

Just as critically, and at all times, most datacenter operations strictly follow certified procedures, regulatory processes or a combination to ensure compliance in various industries. Processes can be for payment card industry (PCI) compliance, SSAE for CPA and other accounting firms, HIPAA for businesses in the healthcare space, and so on.

And because datacenters generate massive computing power, they’re often manned by certified engineers to provide the ultimate remote IT resources and teams.

Rather than your business having to make significant investments in equipment, IT staff, and ongoing maintenance, these needs are concentrated in a datacenter and managed by a cloud service provider (that’s us!). In turn, the cost for cloud-based solutions has been found to be anywhere from 35% to 50% lower than with on-premise solutions.

Cloud models

There are three viable cloud models your SMB can choose from — private, public, and hybrid. Each model has its own strengths and weaknesses, and any of these models can do what your business requires the cloud to do. The trick is determining the best fit.

Private cloud

These services are targeted towards one company at a time, where all resources are used exclusively by a single organization. Infrastructure such servers and datacenters can be located on premise or maintained in a remote location and managed by a third-party vendor, again just for a single company. As needed for computing capacity, organizational expansion and the like, a company can use multiple private clouds simultaneously.

Consider the private cloud as an extension of your business’s IT department with the help of a third-party service. This model is best if you’re concerned about data security and are subject to strict data compliance regulations.

Public cloud

Connecting to a public cloud means using an Internet connection to access computing resources hosted in datacenters managed by a third-party cloud service provider, rather than owning and maintaining these resources on-premise. Public clouds are aptly named, in that multiple organizations share the same infrastructure, although in a segmented manner that enables each organization to still make services “their own.” Many businesses in fact use multiple public clouds to support various operations.

Hybrid cloud

Also aptly named, a hybrid cloud computing environment uses a mix of on-premise private cloud and third-party public cloud services, with orchestration between the two platforms. By allowing workloads to move between private and public clouds as computing needs and costs change, hybrid cloud services give your business greater flexibility and more data deployment options.

Interestingly, 41% of SMBs in the US favor the public cloud. Among that group, 44% use either a single public cloud or multiple ones, 24% rely solely on a single public cloud, and 61% have a multi-cloud strategy. Conversely, only 6% of SMBs use multiple private clouds.

Cloud service providers

By global footprint and customer counts, the largest public cloud service providers are Microsoft (Azure), Amazon (Amazon Web Services or AWS), Alibaba (Alicloud), and Google (Google Cloud). Beyond just being the biggest names in the cloud industry, these providers all maintain datacenter networks that enable scaling on a truly worldwide basis.

Based on SMBs in the US using public clouds the most, AWS is the leading cloud services provider with a 53% adoption rate as of 2019. This marks a significant decrease from 2018, however, when AWS garnered 60% of the SMB market for cloud services.

In the same period, Azure grew from 32% to 41% adoption among small businesses and is still steadily closing the gap with Amazon. (FYI, Visual Edge IT uses Microsoft Azure to deliver its cloud services.) Google Cloud trails AWS and Azure with an 18% adoption rate, with no change since 2018.

Cloud services

Finally, along with choosing a cloud model and provider, SMBs can choose from three types of actual cloud services: SaaS, IaaS, and PaaS. We’ve described each service here and what they provide.

Software as a Service — SaaS — is for consumers

SaaS is the most-commonly used cloud application service and continues to become a dominant way for organizations to access software applications. With SaaS, your business and its users can access a specific software application hosted on a remote server and managed by a third-party provider.

On a subscription basis, users access a SaaS application via a web browser, reducing the need for on-device software downloads or updates. Costs are typically on a per-user or workgroup basis; any updates are made by the app’s developer and are filtered down to users by the SaaS provider. SaaS products are commonly available for business functions like CRM, ERP and collaboration, with Salesforce, Workday, Slack, Zoom, and Microsoft Office 365 ranking among the most popular SaaS solutions.

Infrastructure as a Service — IaaS — lets you move to the cloud and migrate your IT

IaaS is the simplest option for businesses. With IaaS, an organization migrates its hardware to the cloud and the cloud services provider manages the servers, hard drives, networking, storage. Visual Edge IT is an IaaS provider, for good example. Our cloud professionals transition your business’s applications and services to a cloud infrastructure for you, then manage it for anywhere, anytime access by your users.

Platform as a Service — PaaS — helps you build on your IT functionality

Also known as application platform as a service or platform-based service, PaaS is a category of cloud computing services that provides a platform allowing customers to develop, run, and manage their own applications. PaaS comes without the complexity of building and maintaining the infrastructure typically associated with developing an app, launching it and then supporting it. PaaS is also a common platform used to support video streaming. Of note, Microsoft provides its Azure Cloud PaaS as part of the overall Microsoft Cloud offering.

In the end for your business, moving to the cloud is your decision. So is the cloud model and platform you use, And whatever you decide, the cloud is a wise decision given its track record of reducing IT costs, making your organization readily adaptable (as many have had to do for Covid-19), and improving user collaboration and productivity.

Visual Edge IT can help your business determine a roadmap to sustainable growth and navigating roadblocks — including the Covid-19 crisis. A move to cloud computing technology can help. Contact us to take the first assessment step.