What is cloud computing?

The concept of cloud computing may be explained in terms that are familiar in other markets. As a simple example, the notion that one can draw water through a tap whenever it is needed and that only the volume consumed is charged for, is at the essence of the “cloud computing” concept.

The consumption of electricity is a similar example in the sense that once a building or home becomes connected to the power distribution grid, a consumer can use as much or as little power as is required and only pay for the amount actually consumed. 

Cloud computing may be considered a disruptive business model innovation.  The traditional model of firms owning and managing all of its information technology assets has flipped. 

Now, a strong global trend is driving the cloud computing business model whereby firms only “rent” the information technology resources they need and only pay for what they actually use.

OneNet offers the computing power, information storage and software applications required by its business clients, delivered over the Internet.

Clients may choose as much or as little computing and software application resource from OneNet as they wish, thus drawing information technology from a “tap” and only paying for what they actually consume.     

What are the benefits of cloud computing? 

The key benefits of cloud computing are that IT costs are reduced, security is stronger and that a platform is provided for innovative growth.

Why does cloud computing have a lower cost?

Cloud computing provides lower IT costs for most firms because fixed costs are converted into variable costs.  Capital expenditure is avoided and IT costs become operational costs. Only the IT resources actually required for the business are provided, leaving no wasted expenditure.

Needlessly expensive under and over-investment in both IT assets and IT talent is avoided, since only the precise amount of IT resource required is provided and paid for with cloud computing.

As a cloud service provider operates at a much higher scale that a firm’s own IT team, high overheads for specialist engineers, for example, may be spread over thousands of clients, and not just borne by an individual company. 

The benefits of economies of skill are also matched by lower costs of technology, or economies of scale.

Why does cloud computing provide stronger IT security?

IT security provided by a competent cloud service provider is typically stronger than the firm itself can provide.  A competent cloud service provider views security as a core competency, and not a part-time activity, that demands an unrelenting focus.  The cloud provider’s market survival depends upon it.

As a cloud service provider operates at a much higher scale that a typical client firm’s own IT team, the benefit of economies of skill for expensive and scarce security engineers means that security costs may be spread over thousands of clients, and not just borne by an individual company. 

Why does cloud computing deliver a platform for innovative growth?

Once a business moves to the cloud for its computing requirements, it has immediately created a platform for innovative growth.  The firm now has an ability to deliver new services and solutions for its employees and customers, without the need for new and uncertain information technology capital expenditure and face the difficulty of recruiting scare computer engineers.

Computing resources become very scalable, with certain costs.  Highly skilled IT specialists become available on demand.  The barriers to launch new digital initiatives begin to melt away.

In addition, the complexity of IT is replaced with simplicity, as most required IT tasks are effectively outsourced.  The firm becomes more agile and flexible with respect to IT requirements.  Testing and deployment of new applications may be accelerated.

Importantly, since owning and running information technology, per se, cannot create any competitive advantage for a firm, a business will usually improve its performance by using cloud computing services.