Flexible with cloud computing – on good and bad days

The company’s own IT must always be designed to be able to handle peaks in demand. That costs a lot – and often remains mostly unused. Cloud computing is more flexible: only those services actually used are paid for. With this “as a service” approach, even crises are mastered.

Being without business and revenue overnight and not knowing exactly how long the situation will last is a nightmare for companies. For many companies it became a bitter reality during the coronavirus pandemic.

Thanks to cloud computing, companies whose business came to a standstill from one week to the next were able to dramatically reduce their IT resources and thus minimize ongoing costs. The swift response would have been inconceivable, since resource planning in companies with their own infrastructure determines the required capacity for years to come. In the event of overcapacity, capital remains tied up and expensive hardware lies idle. A shortage of resources, on the other hand, requires further unplanned investments.

Depending on the planned application and the need, procuring the servers alone can take days to weeks. There is also a planning phase, not be underestimated in terms of the time it takes before anything can be bought: aspects such as staff requirements for regular system maintenance, data security and the timing and level of investment in the next generation of servers need to be evaluated. In any case, there is no need to rush here. Unneeded, oversized IT can quickly become a wasted investment.

Even before the coronavirus, it was leading to problems. Companies that cannot react flexibly or quickly enough to changes and developments are always at risk of being too late to the market with new applications and products. Indirect costs due to missed business targets are another threat. Any sudden change in the trend of IT requirements can result in a significantly oversized or undersized IT infrastructure. All it takes is a very successful marketing campaign, coverage in a major medium or a single commercial.

Rapid scaling of resources is one of the most obvious benefits of the cloud. However, pure scalability should not be the only factor in favor of the cloud, since the more flexible and volatile the planned infrastructure, the higher the basic or follow-up costs can be. For example, depending on the provider, the payment model shifts to traffic costs. This backfires when traffic costs between individual nodes drive up the overall costs when scaling.

Rapid scaling of resources is one of the most obvious benefits of the cloud.

In the cloud, services are offered in a pay-as-you-go model. In other words, you pay only for what you actually use, and the services can be switched off again immediately once no longer needed. This agile provision of computing power and storage capacity lets companies respond flexibly to customer needs and implement IT projects more quickly.

In addition, cloud applications also foster innovation, as they are ideal for experimentation. If something does not run as desired, new projects can be stopped with just a click, which nips costs in the bud. With the help of cloud solutions, today even small and medium-sized companies can set up their IT flexibly, broadly and globally, and so serve customers anytime and anywhere.

The flexible provision of an “infrastructure as a service (IaaS)” is becoming increasingly popular.

No wonder, then, that the on-demand use of IT services such as software, storage space or computing power via the cloud is on the rise. The flexible provision of an “infrastructure as a service (IaaS)” is becoming increasingly popular. The “Managed Services 2020” study, undertaken by the IT market research company IDG Research, shows how firmly the cloud has now established itself as the basic infrastructure for IT operations. Of organizations surveyed in mid-March 2020, nearly 69 percent reported that the average percentage of their workload handled via the cloud is over 50 percent. For a quarter of the firms, this proportion stands at 80 percent and more.

The most important motives for the study participants to use cloud services are cost transparency and cost reduction. The survey shows that managed cloud services fulfill expectations. Around 64 percent of respondents say they have achieved their cost targets. Just as many were able to use their own resources more flexibly through providers of managed cloud applications. Nearly 70 percent of companies report more flexible costs through outsourced services and the “pay-as-you-go” payment model of those services.

Companies have greater strategic and operational freedom when they consume IT services rather than trying to furnish every aspect of the infrastructure on their own. Not only do they save on investments in their own hardware and the personnel who maintain this landscape, companies also remain strategically flexible and can respond more quickly to changing internal and external requirements by optimizing the architecture and applications for flexibility and scalability and leveraging additional cloud resources or migrating the systems completely to the cloud.

The security requirements for cloud applications are also high. In many cases, after all, sensitive customer or company data are also to be handled. German companies have therefore long been skeptical of a public cloud solution that involves such critical data leaving the company premises.

The IDG study came up with some surprises in this respect and showed that German companies are now placing not only non-critical, but increasingly also business-critical workloads into the hands of managed service providers: over 70 percent of the companies surveyed use services for critical services. Interestingly, 41 percent of the study participants even outsource exclusively business-critical projects – which speaks for a changed perception of the security of cloud services.