The cloud is everywhere. It’s a disruptive force, changing the game forever, ubiquitous even — but could you explain it to your family over Sunday dinner?
While most of us are aware of what the cloud is and can even confidently discuss it in a top-line conversation, many may hesitate if asked for a clear, one-sentence description of what it is and why it’s important — an elevator pitch, so to speak.
What does it boil down to? The cloud is a network of internet servers designed to make storing and accessing content more secure, simple, and efficient.
Let’s unpack that a bit.
Where Did the Cloud Come From?
The idea of the cloud has been around in one form or another since the 1960s. Typically, experts give credit for the concept to one or two computer scientists: JCR Licklider, an early contributor to the creation of the internet, or John McCarthy, who is often referred to as the “father of artificial intelligence.”
Licklider’s vision was heavily focused on interconnectivity; he believed that everyone should be able to access data from anywhere and that sounds pretty close to what we’re seeing today with cloud computing. McCarthy envisioned a similar concept; he advocated for an open global network and saw computers and the internet as a public utility.
Ultimately, it took some time for the concept of cloud computing to become fully baked and ready for public consumption, in large part due to the restrictions on bandwidth that made the internet generally inaccessible until the 1990s.
When Did It Become So Huge?
“Cloud” has certainly been the buzzword that everyone is talking about for a few years now and has at this point effectively penetrated everyday conversation. Cloud hacks are discussed frequently in the news, consumers make sure their iCloud has enough space for all of their vacation photos, and if that wasn’t enough, Cameron Diaz and Jason Segal even did a bit about “no one understanding the cloud” in a romantic comedy a few year back. How’s that for going mainstream?
It’s hard to believe that the cloud as we know it is relatively new and its prevalence as a mainstream topic of conversation is even more so – but it is! For example, Google Trends shows that 2008 was when the public really began looking for more information about the cloud, or more specifically “cloud computing,” which was then still a nascent technology.
Then, as the graph below shows, when conversation around the topic picked up speed, the public got a lot more comfortable dropping the more formal “cloud computing” nomenclature in favor of the colloquial term we typically use today, “the cloud.”
In fact, SAP even expanded its partner ecosystem with 600 new businesses partnering up to work directly with the company’s cloud portfolio. As a result, channel revenue saw whopping triple-digit growth in 2017 with the profit option of the SAP PartnerEdge Cloud Choice program, proving a popular and profitable avenue for “cloud only” partners.
While it’s only one example, this kind of massive cloud exposure is certainly indicative of more extensive market appetite.
Why Is This Important For My Business?
We’ve touched on some of the more obvious consumer benefits of the cloud, but what’s in it for businesses? The short answer? A lot.
We’re seeing more businesses than ever before switch over to a cloud model in order to take advantage of the sizeable perks, including cost efficiency, security, flexibility, and reliability. Moving to the cloud allows businesses to solve problems quickly and, perhaps most importantly, stay under budget while also experiencing massive growth.
How? To get a better picture of this, you need to first consider the alternative. For years, buying or building complex systems and maintaining them internally was the norm for businesses. Too often, businesses would only focus on the upfront cost of building out a legacy system without considering the total cost of ownership — IT support, upgrades, additional hardware, etc.
Take the healthcare sector: Gartner’s IT Budget report last year showed that healthcare companies often spend a whopping 75 percent of their IT budgets keeping internal systems up to date. With a cloud model, you wouldn’t need to worry about those manual updates since this is handled by the vendor automatically.
The important benefit and key takeaway here is scalability, or the ability to grow your IT department at the same pace as your business. When you don’t have to spend all of your IT budget upfront, your business can free up additional dollars to spend on growing. Those saved IT funds can be redirected to support sales, marketing, or other needs. Then when you start expanding, you can expand your cloud services to match.
What Types of Cloud Are There?
The easiest way to break down the types of cloud is by remembering that the three main types refer to preferences in how cloud services are being deployed rather than the actual type of technology being used.
We’ll start with the most common method of deployment: the public cloud. With this option, cloud services are owned, operated, and provided by a third-party vendor — like SAP, for instance. The public cloud is the most popular method for good reason; there is no need to purchase hardware or software so you can keep costs low, you don’t need to worry about maintenance because the service provider is, the network is typically reliable since the provider has processes in place to ensure against failure, and the benefit mentioned earlier – scalability. With the public cloud, you can simply add or remove services to align with your business needs.
Living Proof, a science-based beauty startup based in Cambridge, Massachusetts, leveraged a public cloud strategy and experienced a staggering 300 percent revenue growth after integrating SAP Business ByDesign — all without even needing to create an IT department.
But not all businesses are created equal and some would benefit from a different type of cloud – the private cloud. A private cloud has many similarities to the public cloud but also some unique differences. Unlike the public cloud, private clouds consist of services used by and customized for one business exclusively. The private cloud can be physically located on site or may also be hosted by a third-party vendor. The services and infrastructure live on a private network and the hardware and software are dedicated only to your business.
So why do this? The most frequent users of private clouds tend to be government agencies, financial institutions, and other large companies that are willing for forego some cost-efficiency for improved security and more control over the IT environment.
UAE-based wholesale distributor Truebell Marketing and Trading LLC was looking for a scalable IT infrastructure. To establish routes into new markets and accelerate time to value, Truebell opted to migrate to the private edition of SAP S/4HANA Cloud. The distributor can now expand its business in a fraction of the time.
The old saying insists that you can’t have your cake and eat it too, but that’s not necessarily true with the final type, the hybrid cloud. Hybrid clouds combine on-premise infrastructure with public clouds so businesses can get the best of both worlds. In a hybrid cloud, data and applications can move between private and public clouds for greater flexibility. Not all business tasks are created equal; you don’t necessarily need the same level of security for firing off emails to your colleagues that you do for more sensitive tasks like financial reporting. The hybrid cloud provides more opportunities for you to customize your IT environment and use the best cloud for the job — meaning you only pay for extra power when you need it.
For example, MOD Pizza, a U.S.-based chain of fast casual pizza restaurants with over 190 stores and 3,400 employees, has been experiencing massive growth. As a result, the company was hiring more than ever, up to 300 new employees a week, many of whom have troubled pasts or criminal records, as part of the company’s second-chance focused mission. Faced with this challenge, the company leveraged a hybrid cloud solution from SAP to fill important needs in the HR department. By using SAP SuccessFactors solutions, Mod Pizza was provided the digital infrastructure to retain the same personalized employee experience that has contributed to the company’s tight-knit, customer-centric, and community-driven culture as they expand.
You now have deeper insight into the basics of the cloud that you can pass along. We’ve covered a lot of ground here, including identifying a simple definition of the cloud, exploring a bit of its history, listing different cloud variants, and breaking down why it’s so vital to businesses today.
When you’re surrounded everyday by the latest and greatest technology like we are at SAP, it’s important to remember that not everyone shares that experience. This means that regardless of whether we’re talking to customers, friends, or colleagues, it’s imperative that we’re able to distill down the high-level technological concepts driving business today into easily digestible, bite-sized chunks that even your grandparents can easily understand and internalize.
Cathy Daum is senior vice president of Global Channels & General Business for Cloud Sales & Solutions at SAP.