Benefits of Cloud Computing

Cloud computing has revolutionized how businesses use IT. Hardware is no longer purchased and operated in-house. Instead, XaaS (“X-as-a-service”) models are used. This means that IT services are rented on the basis of virtualized hardware and operating systems. Cloud computing includes the storage and processing of data as well as the hosting of applications and interfaces. All in all, cloud computing offers a variety of advantages, but also has a few disadvantages.

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Cloud computing offers economic advantages

For many organizations, the biggest immediate benefits of cloud computing are economic ones. There are other benefits as well, which we will discuss below. However, these almost always require weighing up the pros and cons of using the cloud. When considering the economic advantages, a distinction must be made between the use of a public cloud and your own private cloud. The former can be used immediately without high acquisition costs, but the latter involves costs for setting up your own structures.


You can find all the background information on the public cloud in our white paper “Public Cloud - The successful route to digital transformation”.

Better products and services

For most companies, technology is a means to an end. Many businesses sell products and services that are non-technical in nature so it's ideal when technology becomes invisible. The cloud makes that possible.

Using cloud computing means that a company can pay less attention to technical aspects. Instead, they are free to focus on the business’ core tasks. This leads to better products and services and higher efficiency. After all, a greater share of the resources used contributes directly to success.

Let's imagine a large bakery chain. It may need computing capacity for logistics, sales, marketing, etc. Instead of running its own servers or data centers, it makes sense to use cloud resources. The exception is dedicated technology companies since it may be worthwhile to set up and operate their own capacities. Even then, private cloud solutions could be considered.

Greater flexibility

The use of cloud computing leads to better flexibility. The IT infrastructure required is available immediately and can be scaled as needed. This means that opportunities and risks can be responded to immediately. In the past when companies invested in IT infrastructure, this new technology would be used for a long time since many companies didn’t want to invest more money not long after in order to take advantage of new technological developments.

Cloud computing makes it possible to react more quickly to changing conditions. Companies can adapt to the market without having to plan, approve, and build infrastructure. By forgoing these time-consuming and costly processes, the technology simply serves to implement the strategy.

Lower costs

Cloud computing often helps companies to lower costs. This is because they don't have to acquire and operate the IT infrastructure themselves. Only “thin clients” are required for employees. In most cases, any modern device with a web browser is sufficient. As well as saving money on buying its own hardware, the company also requires fewer IT staff. Furthermore, the focus shifts away from maintenance and network technology to more direct support for employees.

Cloud services scale up or down depending on the actual load. Therefore, there is no need to keep excess capacity in-house. Whether renting additional servers or scaling existing servers, this is done either automatically or with a simple click. Cloud computing is particularly attractive for startups since saving on their own hardware lowers the required startup capital. A startup initially rents infrastructure and services on a small scale. As the company grows, the services purchased are scaled up.

More sustainability

When widely deployed, cloud computing leads to greater sustainability. Sharing large, centralized cloud data centers is more efficient than running individual data centers in individual companies.

Large data centers have better options for waste heat management and on-site power generation. For example, there are data centers in Iceland that use geothermal energy. They also find it easier to recycle old equipment when new hardware is purchased. Virtualization also reduces the need for individual devices.

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Cloud computing offers organizational advantages

The economic benefits achieved through cloud computing apply to an entire organization. But there are also numerous benefits within an organization. Digital technology is the backbone for communication and data sharing within the business. Cloud computing allows departments and employees to collaborate faster, more reliably, and more easily.

Consistent management of data

With cloud computing, organizations strive for consistent data management. Data has been the talking point in politics and business for years. It is often mistakenly assumed that more data automatically means more value. However, data is only useful if it is managed sensibly. Otherwise, you are left with a pile of data that you don’t know what to do with. Without sensible management, data is more of a burden than a benefit.

Cloud computing helps to achieve company-wide uniform solutions for storing and evaluating data. In contrast, using a company's “homemade” solutions can quickly lead to chaos. Different approaches to data management put in place at the same time tend to accumulate large amounts of dark data. This data, which exists outside of the intended systems and processes, is a liability.

When managing data in the cloud, web-based formats, user interfaces, and APIs are used for the most part. These are usually based on open interfaces. This makes it clearer which data is located where and how it is accessed. For optimal data management, it is nevertheless essential to involve employees. No technology, no matter how sophisticated, can replace well-defined processes and good documentation.

Better collaboration

When data and services are hosted in the cloud, they are usually accessed through web interfaces. This facilitates access for employees who can work from anywhere. Whether field service, home office, or digital nomadism as freelancers, everyone uses the same web-based workflows and tools they are familiar with. If necessary, an in-house virtual private network (VPN) is used as an intermediate level.

The basic tool for accessing cloud-based services is the web browser. You can run them on simple hardware such as tablets. Mobile devices are cheaper, easier to maintain, and more portable than traditional desktop computers. Most data is stored in the cloud rather than on the device itself. Cloud storage usually creates automatic backups and audits when data changes. This reduces the risk of employees inadvertently causing a data breach.

Cloud computing offers advantages in terms of security

Security and data protection are important issues in digitalized society, which is why using the cloud is very advantageous. However, this very insight is difficult for many people to grasp because the cloud is “invisible”. Where exactly is the data kept? Objectively speaking, the cloud offers numerous advantages for security and data protection, but it needs to be used with expertise and care, especially when it comes to the topic of cloud security.

Improved data security

Data has become a hot property. Many criminals attempt to steal data in order to misuse or sell it. In addition to those directly affected, the companies involved also suffer. They could be met with severe fines and legal consequences if customers' private information is leaked. Companies could even lose customers and have their image tarnished because of a data leak.

Large cloud providers use dedicated resources to protect themselves from hackers and other attackers. They use their own departments with top-class specialists and the latest technology - a level that cannot be achieved by any small company. Another advantage of using the cloud is the standardization and certification of the systems used. If you build your own infrastructure, it has to be certified, which costs time and money. This makes subsequent adjustments to the system more difficult, as the certification process may have to be repeated.

Better data protection compliance

Because data is invisible, data protection is generally a difficult issue. The business is always responsible for protecting data as it accumulates. The best approach is to build data protection into structures from the start. A commendable goal, but a major undertaking for a single company, which is why it is easier to rely on established cloud systems.

Cloud provider systems are certified according to official standards. The providers go to great lengths to ensure compliance and have their own legal department and experts for technology and security. This ensures a high degree of reliability.

More reliable disaster recovery

In IT, the term “disaster recovery” refers to a recovery process. If something goes catastrophically wrong, how do you get things back to their original state? With the cloud, disaster recovery is often easier, faster, and more cost-effective. What was once only possible for large companies is now available to the general public.

Cloud providers rely on globally distributed systems. Data and services are available in multiple copies. This means that there is no “single point of failure”, i.e. no Achilles' heel that would bring the entire system to its knees. Therefore, even if a server or data center fails, there is usually no permanent loss of data or capacity.

The intrinsic scalability of cloud services means that failures can be responded to rapidly. Backups built into the infrastructure allow data to be restored.

Cloud computing offers technological benefits

In addition to the economic-organizational and regulatory aspects already mentioned, there are also technological advantages. At the end of the day, the cloud is based on technological progress. Therefore, the technologies used can determine the opportunities that arise.

Optimized big data management

Big data management poses serious challenges to organizations. When we talk about big data, we are referring to very large amounts of data. It can quickly reach a petabyte (thousands of terabytes) or more. Cloud computing offers several advantages in these cases.

Capturing, storing, processing, and retrieving large amounts of data requires a specially adapted infrastructure. It is very costly for a company to build this itself. In many cases, it makes more sense to use existing XaaS solutions from large providers. One characteristic of big data is that large amounts of data are often added in a short period of time. It is then particularly important to be able to scale storage and computing capacities easily. This is usually only possible with cloud solutions.

Better DevOps

Modern development projects involve another class of specialists besides programmers and project managers - the so-called DevOps engineers. The main focus of DevOps is to provide the structures for developing and operating software and to keep these structures running. The use of cloud technologies is instrumental in this.

The development of cloud computing was accompanied by local development and deployment approaches merging together. Container virtualization in particular was expedient. The software is developed in a local environment and later runs in a distributed cloud system. The basic technologies are similar in both cases. With the cloud, however, the approaches are more powerful and, above all, scalable.

Passionate developers often want to use the latest technologies for their projects. Traditionally, however, the hurdle was that the required structures had to be built up within the company first. This isn’t the case when using the cloud, which makes it easier for companies to stay up to date. This is an attractive advantage that helps to accelerate development projects and attract ambitious talent.

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What are the disadvantages of cloud computing?

Like every technological innovation, cloud computing also has its disadvantages. If services and infrastructure are rented and not operated by the company itself, the company is strongly dependent on the providers. For companies focused on technical products, the associated loss of control may be unacceptable.

To a certain extent, “Infrastructure as Code” concepts can protect against the dreaded vendor lock-in. This means that it is still possible to switch between providers or to use your own private cloud. In so-called multi-clouds and hybrid clouds, systems and data are distributed across several private and public clouds. This helps to reduce dependencies on individual providers and to maintain sovereignty over your own data.

Cloud computing provides companies with an unparalleled level of flexibility. However, keeping up with technological development also puts companies under great pressure. New methods and approaches are constantly being added and technology is considered out-of-date after only a few years.

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