Computing as a Cloud-Hosted Utility Has Become a Mainstream Idea

Small and medium businesses are increasingly adopting cloud, according to a recent survey. In fact, it is almost ubiquitous, with 95% of SMBs now using cloud or planning to use it. As businesses are increasingly using these services, the notion of cloud as a utility is going mainstream.

• Business Cloud on the Rise: Survey
• Cloud Hosting as a Utility
• Business & On-Demand Cloud Hosting

Business Cloud on the Rise: Survey

Almost 19 out of every 20 SMBs currently use a cloud service or are in the planning stages of adopting one, according to a recent survey. Many companies are transitioning to cloud hosting because they are frustrated with their providers of traditional web hosting services.

The poll, from industry research outfit Clutch.co, looked at 300 companies with fewer than 1000 employees. Nearly three-quarters of respondents (72%) said that they have switched hosting web providers since 2011. Fully 86% of businesses said that they had problems with their web host within the last twelve months.

The primary issues experienced with web hosts were downtime (35%), speed and reliability issues (33%), price (32%), bad customer service (27%), and resource constraints (26%).

Cloud Hosting as a Utility

More and more, we are connecting with services that are powered through the cloud, via a distributed network of machines that are physically inaccessible to us. That’s true from both a consumer and business perspective.

It’s common among consumers via services ranging from Uber to Siri to Spotify, notes Bob O’Donnell of Recode. Businesses also have access to many cloud systems “from the likes of Salesforce, Dropbox and hundreds of other companies,” he says. “There’s also a rapidly growing business in offering cloud computing itself as a service.” That last option of a standalone plan, sometimes combined with other services for managed cloud hosting, is also called infrastructure as a service (IaaS).

All of these types of services are geared toward tapping a nearly limitless pool of computing resources, storage room, and high-speed network connections to facilitate computing as a utility, similar to the way we plug into the wall and connect to the power grid. Web firms develop platforms and applications using the utility as a base, as a core component of their business model.

Long-standing enterprises, on the other hand, have generally not moved as quickly to the new form of agile and highly scalable computing. Many of these organizations have created private clouds within their own datacenters, combining them with public clouds of third parties to create hybrid clouds. In fact, Research and Markets estimates a CAGR of 19.8% for hybrid cloud between 2016 and 2020.

Of course, some companies have been slower to move to the cloud than others. Why? One reason is because they have been unsure about letting their data outside of their own premises. Firms are also concerned about what it means for their IT departments, in terms of a transition to a service broker model.

As time has passed, though, businesses have realized that the rewards outweigh the risks of stepping forward into the third-platform era. In fact, some of the concerns companies have found are now thought to be unfounded. “In the case of trust and security,” says O’Donnell, “it’s becoming increasingly clear that companies that specialize in cloud computing are so highly focused on security that they’re probably going to have a safer environment than a company’s own network.”

Additionally, there are more companies that are offering managed cloud hosting (the IaaS services described above), so that businesses can more easily adopt cloud without the need for as much in-house knowledge.

Since cloud has significantly matured over the last few years, it is now a standard way to access computing within the business world.

The agility allowed by the cloud improves the ability of companies in numerous ways. They can quickly develop and deploy mobile versions of business applications, for instance, and they can integrate with affiliates and services without nearly as much hassle.

The transition to cloud also means that many companies will move away from running their own data centers on-premises. Instead, they will access those resources as a utility from a third-party provider. For firms such as Cisco, Dell, and HP that have made a lot of money selling servers and other hardware for company data centers, this sea change has been and will continue to be challenging to navigate.

Needless to say, the cloud is not an all-or-nothing proposition: many companies will continue to run legacy systems on-site. Plus, the transition to cloud will take time for large organizations, notes O’Donnell. “But just as few companies today think of running their own power grid,” he says, “there may come a day when companies will look to… compute utility companies to deliver some of the services they now provide.”

Business & On-Demand Cloud Hosting

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