Cloud computing is perhaps not a term often heard in daily conversations, but it is one with a far-reaching impact on our technological needs. From expansive options of online data storage to numerous suites of web-based productivity tools like Google Workspace, nearly everyone has used a cloud-enabled technology.

Over the last decade, this high degree of versatility also underpins the rapid cloud uptake among businesses. In fact, one survey has found that 94% of companies have already shifted their computing workloads on cloud platforms to varying extents.

Unsurprisingly, the market size for cloud technology continues to grow exponentially. With a CAGR of 16.3%, its projected worldwide growth is estimated to reach a staggering $947.3 billion by 2026 from only $445.3 billion in 2021.

While much of its novelty has gradually waned, following the rise in demand, like many tech buzzwords seeping into the mainstream, the technology can contextually vary from one use case to another. In the broadest sense, however, cloud computing refers to the provision of digital applications on a scalable, often remote hardware infrastructure—traditionally developed by highly modular Service Oriented Architecture (SOA).

So how does cloud computing work, and why is it crucial in custom software development? This article will provide critical insights and information to help you decide whether cloud adoption is the right call for your business.

An overview of cloud computing

In essence, cloud computing runs on the same principles as every other computer network. It houses an interconnected ecosystem of architectures and hardware that enable a variety of devices to engage in a seamless exchange of information.

Unlike its conventional counterparts, which require strict on-premise support, cloud computing grants easy access to shared computing resources through the Internet. These resources encompass networks, servers, databases, operating systems, frameworks, software applications, etc. With this, companies only pay for services they take up and scale operations in any direction according to their needs. This process eliminates the need for lengthy procurement and recalibration of resources and tools during each use, as cloud providers already bundle the services into pools and commission them as required.

Different types of cloud computing

By distribution

As the technology undergoes an unprecedented boom, cloud offerings have also diversified to accommodate various markets. In terms of service distribution, the technology’s accessibility and engagement are the primary qualities that form the basis of the classification.

Public clouds are the most common type, with giant providers like Amazon Web Service (AWS), Microsoft Azure, and Google Cloud dominating the scene. As its name suggests, this model offers remote access to its services to the public.

In contrast, private clouds dedicate configurable services to a single tenant, typically a large enterprise catering to a B2B market segment. While remote installation is generally the norm, companies can now install on-premise private cloud infrastructure and have it maintained by a third party.

Hybrid clouds and multi-clouds integrate two or more clouds to work in tandem within a business ecosystem, helping companies maintain operations during unforeseen downtimes.

By services

Cloud computing facilitates horizontal scaling to end users across different levels of resource provision they need. Thus, besides distribution models, we can further distinguish cloud offerings according to the types of services rendered by cloud providers, which fall under three main categories:

  • Infrastructure-as-a-Service (IaaS) – This particular cloud service is a great alternative to the cumbersome and expensive recurrence of IT infrastructure upgrades. With IaaS, service providers guarantee the provision and maintenance of the existing hardware, giving end users more time to focus on managing the critical middleware, applications, and operating systems they wish to use. IBM Cloud, AWS EC2, and Oracle Cloud Infrastructure are among many notable examples of IaaS in the market.
  • Platform-as-a-Service (PaaS) – This cloud-based solution provides programmers and developers with critical resources they need, from the underlying infrastructure to the computing platform, to build, scale, and test their applications online. Examples of PaaS include Azure Web Apps and Google App Engine.
  • Software-as-a-Service (SaaS) – The SaaS model enables vendors to host their applications directly on the cloud through remote virtualization. On the users’ end, this means they can quickly access a software application via a designated API or a portal online. Since the application isn’t installed locally on the user’s computer, the general upkeep of the software thus falls upon the shoulders of the providers. Common SaaS applications range from free programs with additional paid services like Google Docs, Wave, and Slack to subscription-based apps like Salesforce CRM.

The role of cloud technology in software development

Multiple factors at play have lowered barriers to entry into the cloud market itself. For starters, the growing interest in cloud computing over the years, followed by massive investments in the technology, has made cloud-based developments increasingly viable and lucrative for businesses. Consequently, the starting costs to set up and migrate to a cloud environment have significantly decreased over time, leading to a steady increase in cloud participation and spending. 

We can see how this trend has shaped the average market price for cloud adoption. A comparative cost analysis by SherWeb has found that the monthly ownership cost of a cloud server amounts to only $313.90, which is arguably 79% lower than that of an on-premise configuration.

The increased participation in the cloud also opens up market opportunities for more SaaS products—extensively boosting healthy competition among companies looking to leverage their own cloud innovation.

Another factor contributing to the cloud environment’s growing popularity is its compatibility with myriad high-demand automated tools, which require enormous computing power. For example, containerization platforms to expedite application deployment and management, such as Kubernetes and Docker, have become integral to cloud developments. Other trends that have come to the fore with the rise of the cloud include the implementation of microservices to architect complex applications and the integration of logic-building and data processing tools for AI/ML capabilities.

Advantages of cloud development

Based on that explanation, it is clear that cloud technology edges over its peers in the following areas:

  • Cost – Setting up a cloud environment is far cheaper than commissioning a development project in a traditional setting since it involves no high-capital purchases. Most cloud providers also implement pay-as-you-go pricing plans, which align well with the peaks and valleys of the development lifecycle.
  • Agility and scalability – Since the cloud provider assumes all the necessary provisioning of IT resources at scale, your DevOps team can build, release, and test your software much faster. You can even achieve quicker time-to-market by developing your application directly on the cloud environment. This high efficiency, in turn, frees up the much-needed resources to build new offerings.
  • Added protection – Most cloud service providers employ advanced security safeguards and policies to protect the cloud ecosystems against potential threats. This preemptive initiative allows companies to reinforce their existing data backup and crisis response protocols.
  • Portability and interoperability – End users can tap into available services across a wide range of devices with only an internet connection.

Caveats to note

Cloud technology has undoubtedly helped unlock new revenue streams, circumnavigate development challenges, and streamline the DevOps cycle. Yet, there are still a couple of caveats that companies must heed:

Over-reliance on providers

Although being relieved from the administrative burden of handling the underlying infrastructure dramatically improves efficiency, sans situational cognizance, companies can become overdependent on the service providers. This can spell trouble in the long haul if the vendors ever decide to discontinue particular services or if the cloud suddenly experiences prolonged system failures. Without any other recourses on hand, these disruptions not only cause a massive operating loss but also give your competitors enough time to undercut your strategy.

Cloud overspending

It may sound antithetical that the one innovation allowing companies to save on millions can also be the sole reason for their ballooning operational costs. But this is the reality that some companies have gone through. Some analysts attribute this to our collective lapse in recognizing how the cloud lifecycle affects the company’s performance long-term as the technology matures. Meanwhile, others see the raking up costs as a direct consequence of aggregating workloads on the cloud without proper data management, which offsets the initial returns during the early days of cloud adoption.

But the prevailing issue seems to come from the absence of mechanisms to track and control the budget for cloud adoption itself, which, in some estimates, has wasted companies 20% or more on cloud buying. As expected, nearly four out of ten companies admit to overspending due to the lack of proper cloud strategy and toolkit. Another report echoes a similar sentiment—citing that “idle” and “oversized resources” have incurred a whopping $17.6 billion in unnecessary cloud spending.

Building and migrating an application to a cloud environment typically involve many moving parts. As a result, companies are strongly warned not to hastily opt for an ad-hoc strategy when taking their systems to remote virtualization. As demonstrated above, improper planning often leads to cost overruns and ultimately hinders businesses from scaling their digital transformation to its fullest potential.

It is also essential to consider the many intricacies involved with cloud-based development. Understanding the inner workings of cloud programming, including data decoupling on microservices, architectural modeling and abstraction, and API integrations, among others, has been invariably paramount to the success of cloud adoption.

Interested in learning more about how to leverage cloud computing for your business? Feel free to get in touch with us.

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