Unless you are a turtle, you know that “the cloud” is not referring to weather, but to deploying tech online.  It turns out that the ad copy from several years ago was true: just about any problem can be solved merely by “putting it on the cloud”.

The cloud is actually quite simple: it is variously the on-demand storage, and on-demand processing power of applications that “live” on the internet, instead of in corporate server rooms.

The benefits:

• The infrastructure is “rented”, so no more capital expenditures or maintenance costs for running corporate server rooms.
• Storage space and processing capacity can easily scale, so both peaks and organic growth can be accommodated.
• Third parties have developed many cloud-based apps, which means that organizations don’t need to build functionality themselves.
• The cloud is accessible from any device: computer, smartphone, tablet, and devices not yet invented.  In most cases, without special software (or ongoing maintenance).
• Many cloud apps have interconnection features built in, improving collaboration amongst users.  This can easily be done with internet technology, but is just about impossible on legacy server-based or mainframe-based software.  Software such as Zapier or Make allow for powerful automations.
• Cloud providers are putting new capabilities online (particularly machine learning and AI) that may not have been economically feasible for you to access otherwise.

Cloud computing isn’t just for large enterprises.  Google Workspace provides incredible functionality for pennies per day per user.  Ringcentral moves an entire phone system online.  Salesforce.com and ActiveCampaign provide complete turnkey CRM (Customer Relationship Management) systems.  And if you want to write custom applications yourself, Amazon AWS will provide on-demand storage space and processing power.

Yet despite the great promise of the cloud, there are downsides, and question:

• What is the “problem” that needs to be solved?  In the olden days, the decision was usually buy vs build.  Today, it’s buy vs build vs rent – and the analysis to determine which route to go is still just as important as it used to be.  Renting cloud-based software is a lock-in, where you may be captive to ever-increasing monthly costs.
• Will a move to the cloud give a competitive advantage to the organization?  One one hand, it might provide better functionality faster; on the other, if your infrastructure is identical to everyone else’s, how can technology give you a competitive advantage?  That being said, the use of cloud-based AI and automation tools provide a path to differentiation.
• Do you currently have the in-house skills to manage a changing cloud infrastructure?  (It’s a vastly different skill set than managing on-premise technology.)
• How is security being addressed… in detail?  There isn’t a week that goes by without a report on security and privacy breaches.  What would happen if your systems were breached?
• If you move core systems to the cloud, what changes might be necessary to staffing? Where are the cost savings?
• What process changes can (or should  or must) be made to accommodate the new system?
• What is the exit plan if you wish to move from one cloud provider to another.  Or from the cloud, back in-house?
• What is the financial stability of the cloud provider?  If you are outsourcing key business systems to them, you don’t want to wake up to find them  – and your business systems – no longer around.

Yes, the cloud is pervasive, and solves many of the world’s technology (and marketing) problems?  But with some cloud costs scaling significantly (while others are dropping), what is the net financial effect of using these technologies?

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