16 Feb 2016David Richards, Computer Business Review

How the cloud is changing the way we do business

Most of us today use Dropbox, iCloud and Facebook - we have become accustomed to the idea of storing our personal data in the cloud. But the cloud is also driving a quiet revolution in the way we work and the way businesses are run.

It is no coincidence that the fastest growing company in 2016 will be Amazon Web Services - a cloud computing company. It is said the cloud is to computing what the grid was to electricity generation in the 1920s and 1930s - soon, people won't recall the time when they didn't flick the switch to get access to computing as they do for power.

Cloud computing offers a natural competitive advantage to entrepreneurs bold enough to think outside the box. It enables companies to move quickly from an innovative idea to an actual product or service by removing big upfront investments in technology. It allows businesses to scale up or down quickly providing much needed flexibility when responding to changing customer demands. It removes geographic constraints and opens new markets that were previously not accessible. It also enhances external collaboration with partners and customers.

As the era of office working slowly draws to a close the cloud is playing a vital role in ensuring employees keep in constant contact through their laptops, phones and tablets. By 2020 it is estimated there will be 30 billion such devices and eight billion people connected to networks generating 40 trillion gigabytes of data. The cloud is going to be an increasingly vital ingredient in how we collect, analyse and store the data we are all creating.

For those working in multinationals hamstrung by a legacy IT infrastructure, the cloud is something they must embrace to stay ahead. FINRA, one of the largest independent securities regulators in the United States has now moved about 75 percent of its operations to the cloud through Amazon Web Services. It estimates it will save up to $20 million annually by using AWS instead of a physical data centre infrastructure.

Zack Hicks, Toyota's CIO in North America has been leading the efforts at Toyota to embrace cloud computing. Moving to cloud applications has allowed Toyota to streamline its business, providing their IT teams with more flexibility to actually create new technologies for their cars.

Yet many companies remain hesitant to embrace the cloud due to security concerns. Some of this hesitancy is practical such as how does one move petabytes of data that is transactional and hence continually in use? With technology such as WANdisco's Fusion active replication making it easy to move large volumes of data to the cloud whilst continuing with transactions, companies can now move critical applications and processes seamlessly to cloud.

The irony is in certain circumstances a move to the cloud offers a chance to upgrade security making it much more secure than on site servers. The UK government is leading the way in this regard having already moved the Supreme Court and HM Revenue & Customs online in the last year.

Switching to the cloud is not just about technology - it is about business transformation from operational processes to organisational structures. The cloud is disrupting markets by allowing new entrants to rapidly enter and scale up. It is spawning new business models by transforming the ways companies are organised as IT departments are increasingly integrated into operations. Through increased data analytics it is revolutionising information sharing and business management.

The cloud is already an integral part of our lives - without it there would be no Spotify, no Gmail and no Netflix. In the end businesses that are too slow to adopt the benefits are likely to face a serious and growing economic and business disadvantage. It's time for more businesses to get on the grid and flick the switch.