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Cloud Computing Benefits

13 Key Benefits of Cloud Computing

If you still have major concerns about moving your valuable data or important workflows to the cloud, you should consider these benefits of cloud computing and see how they can give your business a competitive advantage.

Aleksander HougenBrett Day

Written by Aleksander Hougen (Co-Chief Editor)

Reviewed by Brett Day (Writer, Editor)

Last Updated: 2024-07-11T10:27:09+00:00

All our content is written fully by humans; we do not publish AI writing. Learn more here.

Key Benefits of Cloud Computing

Cloud computing refers to any and all computer resources that are delivered on-demand over a network, usually the Internet.

Over the past two decades, cloud computing has grown from its infancy into a core component of basically every large business and industry. Moving data and workflows to the cloud has obvious advantages over traditional on-premises infrastructure, but some benefits of cloud computing are less apparent.

A common concern with cloud computing is security, as entrusting cloud-based services with operation-critical or sensitive data can seem like a risky proposition. This is still an issue for certain fields that deal with highly confidential information, but it’s not insurmountable. In most cases, cloud-based computing solutions can provide stronger security than local infrastructure.

Besides security, the benefits of cloud computing include cost reduction, improved security, loss prevention, disaster recovery, scalability, elasticity, integration, mobility, collaboration, better insights, automated software updates, quality control and sustainability. Below is a full list of the most important benefits of cloud computing.

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Key Takeaways: The Main Benefits of Cloud Computing

  1. Cost Reduction: Due to economies of scale, in most use cases, renting only the infrastructure you need is cheaper than building and maintaining your own local computing architecture.
  2. Security Improvement: Setting up and maintaining your own complex security solutions is costly and leaves you much more vulnerable to new exploits and attacks.
  3. Loss Prevention: Cloud computing solutions usually include systems that prevent leakage or accidental deletion of important data.
  4. Disaster Recovery: Data stored on the cloud is much easier to recover after a disaster, and cloud computing can provide disaster recovery functionality for on-premises solutions. 
  5. Scalability: Scaling a service up or down is a lot simpler within the cloud. If you need more or less resources, you can simply change how much you’re provisioning from the cloud.
  6. Elasticity: Many computing use cases don’t have consistent loads at all times. Cloud solutions are elastic, meaning they can automatically provision more resources as needed based on real-time demand.
  7. Integration: Cloud-based solutions are often huge, integrated ecosystems filled with a variety of applications and platforms for different scenarios.
  8. Mobility: Although you can access cloud computing solutions from anywhere, with an on-premises solution, you must be physically present on-location or connect to the local network with a VPN. 
  9. Collaboration: Keeping all non-confidential corporate data on cloud storage — as opposed to local networks or individual office computers — ensures that collaboration becomes seamless.
  10. Better Insights: Because a cloud computing service must keep a record of its infrastructure’s usage, the user also gains insight into where and how those resources are being spent.
  11. Automatic Software Updates: On-premises architecture requires a much greater degree of involvement when it comes to keeping everything up to date. Using a cloud-based system, the provider handles this task.
  12. Quality Control: By centralizing data and processes with a cloud-based platform, it becomes easier for multiple users to work together to ensure the quality of their work.
  13. Sustainability: Cloud computing can lower an organization’s carbon footprint by reducing waste.

1. Cost Reduction

Cloud computing cost reduction comes in the form of reduced maintenance and operating costs and is one of the biggest benefits of the cloud.

Operating any kind of software solution or computing architecture on local infrastructure is expensive, both in terms of initial investment and ongoing maintenance costs. Age-related hardware deterioration is inevitable, and the sooner you start migrating to the cloud, the quicker it pays off in cost savings.

According to a 2020 study by OpsRamp, 94% of the 137 U.S. IT executives surveyed said they expect to reduce infrastructure costs by partially or fully migrating to public clouds.

2. Security Improvement

Improving the security of a system means implementing policies and tools to keep data and workflows safe from unauthorized access. Moving to the cloud has both advantages and disadvantages when it comes to security. Keeping all your data on-premises offers a degree of complete control that cloud computing can’t match. 

That said, mature cloud solutions spend an enormous amount of resources ensuring that their security measures are up to date, which is a running battle that can be difficult for an in-house IT team to maintain. Still, good cloud security relies on planning and rigorous application of policies pertaining to data access and management.

In a survey by Microsoft in February 2023, a senior IT manager in the financial services sector said this about cloud security:

It’s time to stop living in this legacy mindset that everything needs to be a physical thing in our four walls that we have to be able to touch and feel to feel safe.”

With any security system, the weakest link is the people using it. Because an on-premises solution handles everything from core architecture to user access, there are far more vectors for social engineering attacks. 

Moving to the cloud can make things safer, but only if solid security policies are put into place. A 2019 Gartner survey of CIOs estimated that as much as 99% of cloud security failures are due to user error, rather than a failure of the cloud service itself.

3. Loss Prevention

Loss prevention refers to systems and processes that mitigate the loss of critical data when errors and disasters occur. Cloud service providers generally come with mature data loss prevention (DLP) tools that require you to define policies for data handling.

These kinds of systems exist for on-premises solutions as well, but systems that aren’t cloud-based require more setup and maintenance, greatly increasing the workload for IT teams.

Businesses that move their data storage and DLP solution to the cloud find it easier to implement or recreate policies, and have a much higher degree of confidence in the system, according to a February 2023 Microsoft survey of CIOs.

In the same study, only 2% of respondents who have some DLP systems on-premises weren’t interested in moving to the cloud at all, while 59% wanted to move all their systems to the cloud in the near future, and 39% intended to move some.

4. Disaster Recovery

Disaster Recovery is the process of recovering lost data and returning to normal operations as quickly as possible after a critical error. Cloud computing solutions provide important benefits for disaster recovery. Most importantly, you’re not reliant on a set of hardware that can be compromised due to ransomware, natural disasters or accidents.

As with all on-premises solutions, acquiring and maintaining this hardware is expensive. As your data and operations scale, you’ll need to purchase more and more hardware that mostly sits idle until you need it during a disaster.

That said, there are some downsides to cloud disaster recovery. An on-premises solution will generally have a higher uptime and lower latency due to physical proximity. This can be important if you need to restore large datasets quickly to ensure business continuity.

The cloud has already seen wide adoption when it comes to disaster recovery. According to a 2018 study by CloudEndure (an AWS subsidiary), 47% of respondents said they used public cloud services for their disaster recovery, while 39% used private clouds and only 15% used physical machines.

5. Scalability

Scalability in cloud computing refers to the ease with which the administrator can scale up the system’s capabilities.

The ability to scale IT services, whether internal or external, is perhaps the most significant benefit of cloud computing. In a traditional architecture, scaling up operations inevitably involves purchasing and setting up even more hardware. This obviously leads to higher costs, but also decreased flexibility as ordering new equipment can involve slow procurement processes.

With a cloud-based system, scaling up to meet higher demand can be done within minutes, as all you need to do is purchase access to more resources.

6. Elasticity

Elasticity is a system’s ability to notice rapid changes in usage or traffic and respond accordingly. While scalability covers planned increases in demand, not all applications or services have predictable or stable usage patterns. 

For these types of use cases, a traditional architecture demands plenty of redundancy to secure enough computing power or data storage space during times of high load. That means this redundant capacity sits around unused at other times, which is a waste of resources.

Elastic cloud computing services allow the user to set rules for auto-scaling, enabling applications to scale up quickly to meet sudden demand and then scale back down when traffic returns to normal.

7. Integration

Integration, meaning a system’s ability to connect to outside services and architectures, is a key benefit of cloud computing. Depending on the provider you pick, moving data and workflows to the cloud unlocks a wide range of integrations.

This takes the form of ecosystem integrations, like the various services offered by providers like AWS, Microsoft Azure and Google Cloud Platform. It also includes integrations across different cloud providers, third-party tools and software.

On-premises solutions also feature integrations with third-party software. However, the public’s widespread adoption of the cloud combined with its mature and public APIs allows cloud-based services to offer a much broader and up-to-date selection.

8. Mobility

Mobility is the degree to which a solution can be accessed from any type of device. A big weakness of on-premises solutions is that they often require users to physically connect to the local network, use a VPN connection or a specific type of device.

This makes it difficult to scale a business up to multiple locations or enable staff to work remotely. Furthermore, it makes it harder to adapt to new and emerging technologies.

With a cloud solution, access controls can be configured so that tools and data are accessible from any location without negatively impacting security. New services and tools can also be added without worrying about platform compatibility.

9. Collaboration

Collaboration, the process of working together on the same data or workflows, is made much easier when your data and tools are available on the cloud, even when team members are based in different locations. With an on-premises system, it’s much harder to store resources locally in a way that allows every team member to access them.

10. Better Insights

Insights in computing is the degree to which administrators can see how resources are being utilized. Cloud-based platforms need to track how their underlying infrastructure is being used at all times. This is necessary to correctly provision resources to clients as needed, but also to ensure that clients are billed appropriately for their usage.

Because storage and computing resources are strictly monitored, the user often has easy access to analytics and insights that help them optimize processes and discover bottlenecks. With an on-premises solution, this task requires a much greater degree of supervision and management.

11. Automatic Software Updates

Automatic software updates takes the responsibility out of the user’s hands and is a core security feature in all types of software. With any software solution, one of the biggest and most critical maintenance tasks is making sure it’s up to date. Because digital security is constantly evolving, keeping software up to date is often an important security concern, and missing an update can have disastrous consequences.

Automatic software updates are a key feature of cloud computing. Since clients aren’t tasked with maintaining any of the underlying applications or hardware, the responsibility (and cost) of keeping the system up to date is taken off their hands.

12. Quality Control

Quality control is any system that ensure that products or services meet a certain standard. When data and processes are all stored in a shared space that can be accessed by all relevant stakeholders, it becomes much easier to work in a transparent manner and ensure a quality standard. Since each stakeholder can see what the others are doing in real time, they can mitigate human error through collaboration and reporting.

13. Sustainability

Sustainability in cloud computing is the effort to make computer resources more ecologically sustainable and climate-friendly. For any business looking to lower its carbon footprint, migrating to the cloud is a no-brainer.

For many of the same reasons we’ve already covered, cloud technologies are far less wasteful (and thus more sustainable) than on-premises alternatives. For example, a report by 451 Research showed that AWS is on average 3.6 times more energy efficient than enterprise data centers.

What Factors Should You Consider When Moving to the Cloud?

The important factors to consider when making the move to the cloud will vary by industry, but there are some universal factors. The migration needs clear goals and a detailed plan, and both data management and regulatory compliance need to be thoroughly mapped out. Finally, cost should be analyzed and budgeted.

When making any kind of move to the cloud, it’s important to first consider the goals of the migration, and then determine which workflows and datasets you need to migrate to achieve those goals. It’s rarely beneficial to migrate an entire company’s worth of processes and data in one go, so start with the things that would benefit most from cloud functionality.

Once you’ve decided what needs to be moved to the cloud, it’s critical to create a detailed migration plan that covers systems like loss prevention, data recovery, access controls, load-balancing and more.

Other factors to consider include data management and regulatory compliance. You should figure out if any workflows or data need to remain on-premises, or if they will require additional security measures after migrating to the cloud.

Cost is also important — we’ll cover that in more detail further down — but a good way to optimize costs when moving to the cloud is by starting with solutions that run on older hardware or software. In doing so, you can adopt a hybrid cloud approach right from the start.

physical infrastructure vs cloud systems factors
Pulling off a successful cloud migration requires careful and thorough planning during every step of the process.

If you don’t consider these factors properly before moving to the cloud (or between clouds), it can have disastrous consequences for productivity and business continuity. The results can range from critical data loss to downtime in important customer or employee services.

What Role Does Cost Play When Moving to the Cloud?

Due to varying budgets, cost is a vital factor that any business needs to consider before making the initial move to the cloud or migrating more workflows and data to an already existing system.

As we’ll get to in a bit, cloud migration is a complex process that can involve high costs and resource commitment up front. The larger and more complicated an existing on-premises solution is, the more difficult and expensive it is to migrate. 

One way to mitigate cost when moving to the cloud is by doing it gradually. Much of the cost reduction from switching to cloud computing comes from no longer having to maintain, repair or replace old equipment. Therefore, a staggered approach where the user gradually transitions data and workflows while retiring existing infrastructure is often best.

Since cloud computing services are generally on a “pay-as-you-go” model, costs scale up only when usage does, which makes it easy to dip your toe into the cloud without incurring huge costs straight away.

What Is Cloud Migration?

Cloud migration is the process of moving data, workflows and processes from an on-premises solution to the cloud, or shifting them between different clouds. The exact details of a cloud migration will depend on what you are moving and whether any components of your business will remain on local architecture.

One common way to migrate to the cloud is to simply take the on-premises solution and move it to a public cloud. This is known as “lift and shift,” or “rehosting,” and it’s a useful approach for people who don’t want to spend time training users or those who want to keep an internal solution in place.

Alternatively, if one of the goals of the migration is to utilize cloud features that aren’t available with the existing infrastructure, it might be worthwhile to take the “refactor” approach. This method involves building a new solution from scratch using the public cloud architecture.

Finally, some businesses may want to retain certain workflows or sensitive datasets on-site while moving others to the cloud. This is known as a hybrid or “retain” model, and has the advantage of limiting initial migration costs.

cloud migration types

Image Name: cloud-migration-types.png

Image Caption: Figuring out what type of cloud migration is right for your organization’s data is one of the first steps in creating a migration plan.

There are more cloud migration strategies than the three mentioned above, and you can read more about them in our guide on the six or seven “R’s” of cloud migration.

Does Cloud Migration Include Disaster Recovery Planning?

Disaster recovery functionality is one of the key benefits of cloud computing, so yes, any cloud migration plan should also include disaster recovery planning. Disaster recovery in cloud computing is often provided as part of a managed DRaaS solution.

How Do You Choose the Best Cloud Service Provider?

The cloud provider you should choose depends heavily on the size of your company and the exact industry involved. Small companies that want a simple, generalized solution will probably be best served by Google Cloud Platform, whereas software companies working with .NET architecture will favor Azure. Meanwhile, AWS probably has the greatest pool of experts.

big three cloud applications
The big three cloud environments offer complete cloud
stacks that cover every cloud computing layer.

There are also industry-specific cloud service providers such as Medsphere for the healthcare sector, Salesforce for retail, and IBM Cloud, which offers niche solutions for banking, finance and medicine.

Final Thoughts

With the increasing prevalence of cloud-based applications, it’s becoming less necessary for companies to own IT infrastructure and manage the underlying architecture of their solutions manually. While there are still security concerns surrounding cloud technology, especially for sensitive data, a well-planned cloud environment can easily overcome these challenges.

What did you think of our rundown of the benefits of cloud computing? Did you learn anything new? Did we leave out an important benefit? Let us know in the comments below. Thank you for reading.

FAQ: Cloud Benefit

  • A cloud service provider is a company that offers some sort of service through the cloud, such as an application or data storage.

  • Cost reduction, scalability, elasticity, loss prevention and disaster recovery are the five clearest benefits of cloud computing, while five potential disadvantages include downtime, vendor lock-in, latency issues, internet connection dependency and privacy.

  • Companies use cloud computing in virtually every industry to provide operational IT solutions. Examples include CRM systems, data analytics, web applications and more.

  • The biggest benefits of cloud computing when directly compared to traditional computing are scalability and elasticity.

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