Companies considering updating their business servers are increasingly turning to cloud-based services as they seek to transcend the limitations of traditional IT infrastructure and benefit from more scalable technological solutions.
The prospect of migrating to the cloud is familiarly appealing.
It means that businesses and employees need not be in a physical office to access centralized data. And clients, in turn, can access tax returns, documents, videos, spreadsheets, and anything else on multiple devices from anywhere in the world.
All of which is key for owners looking to adapt to new markets and scale a business.
Migrating their enterprise-level applications to cloud-based solutions holds the promise of allowing companies to streamline their performance, become more agile in adapting to changing circumstances, gain greater security, and optimize costs.
Businesses considering migrating to the cloud have a lot to weigh to determine if it's the right option.
In this article, we gauge the pros and cons of moving enterprise-wide applications to the cloud.
The Pros
Let's dive into the pros.
Improved Flexibility
One of the main reasons businesses usually decide to move their enterprise-level applications to the cloud is because it allows them to transcend the limitations of being tied down to a single location.
They can use technological tools to deliver cost savings and the best customer experience, such as workforce management in call center environments. And moving their company online is the most fundamental example.
When they invest in cloud-based solutions, businesses enable their teams to work remotely and collaborate seamlessly on projects from anywhere at any time, driving greater efficiency.
For example, VIDIZMO EnterpriseTube, a YouTube-like enterprise video platform, aids large organizations in communicating, collaborating, and connecting with teams worldwide using video streaming.
It supports business video use cases, such as corporate communications, video training, marketing and sales, video archival, and live event needs - all in a single solution.
Important videos, audios, images and documents can be accessed and shared from different locations and collaborated on in real-time on any device by employees and clients alike.
By mobilizing their employees, businesses that have migrated to the cloud can provide much greater availability to their clients. On the other hand, customers with improved accessibility of information about their orders are one way to, for example, improve the buyers' shipping experience. This also helps optimize the customer experience - viewed as a key differentiator by today's consumers.
Low Initial Investment and Fast Launch
When managed correctly with the right know-how, cloud platforms are much cheaper to run than onsite applications.
Reason being:
Companies no longer have to buy expensive physical hardware & systems and pay for their upkeep. With traditional enterprise servers, businesses typically face substantial upfront IT operational costs plus added costs down the road.
With cloud migration, quite simply, they pay for what they use.
And this can result in cost efficiency and savings.
Businesses remove the need for on-premise equipment, so one piece of hardware can't fail and derail their operations.
Since cloud technology abolishes the need for moving parts, wear and tear is no longer an issue. Neither are overhead costs such as maintenance, management of secure data storage, and the high expense of enterprise software with its expensive licensing.
Pay-per-use cloud-based options allow many businesses - especially small- and medium-sized ones with limited budgets - to rent what they need and thus increase their ROI.
Scalability
Cloud-based technologies enable companies to trim their sails as markets evolve and their business grows.
For that reason, the cloud option allows businesses to upgrade their infrastructure and storage requirements or downsize their services depending on the flux of the business cycle. The scalability, flexibility, customizability, and support are truly freeing.
It's one thing for a company to have a good idea of what it needs when it first migrates to the cloud.
But as their business grows, the ability to scale up or down to meet the real-time fluctuating demand is a huge advantage. The cloud offers this capability, while traditional servers, typically having a capacity plateau, cannot.
Disaster Recovery
With traditional in-house applications, disaster recovery can be expensive and fraught with hassle and risk.
Should a power failure or a natural disaster strike, businesses must rely on on-premise safe-keeping measures or having backed-up data on another physical device.
Hybrid cloud solutions, in contrast, are built to withstand the failure of components so that there is no single point of failure, and the datacenters of remote cloud servers automatically backup data on the cloud system.
Moreover, providers of cloud-based services usually manage security updates, and it's in their self-interest to keep businesses safe from cyber threats.
Integrations
Cloud technology solutions often come with automatic software integration.
Our VIDIZMO EnterpriseTube, for example, offers secure enterprise video streaming that integrates with other leading business applications like Zoom, MS Teams, and SharePoint. There are some very useful task management softwares like Trello for IT companies and restaurant scheduling software for restaurant businesses. And that comes not just with the benefits of video streaming on cloud versus on-premises but also with flexible deployment options.
The Cons
Now, let's dig into the downsides.
Reliance on High-Speed and Stable Internet Connection
The biggest drawback is the need for a high-speed and stable internet connection. And this can be a barrier to entry in some geographical areas. If employees lack sufficient bandwidth, managing a remote sales team becomes impossible, for example.
If a firm's business is cloud-based and access to the internet is down or unreliable, it could lead to costly downtime.
Price Could Wind Up Prohibitive
While the incentive for many companies migrating to the cloud is to guarantee a return on investment, every business is unique.
Companies, therefore, must do the math of implementing a cloud solution versus purchasing a new server over the long term.
The key is to recognize that hosting and running your server in the cloud is an ongoing expense, different from the capital investment involved in buying a traditional server.
Companies can use different strategies to reduce and manage cloud expenses. Failure to carefully calculate it could mean any hoped increase in their return on investment through moving to the cloud could turn out short-lived.
Security Risk
Some businesses have security concerns about migrating to the cloud. Some see it as a risk to outsource their security and have it out of their hands, given the increased incentive for hackers to target primary servers over private ones.
Source: Salesforce - Benefits of Cloud Computing
That said, the truth is businesses, on average, report enjoying increased security once they transition to the cloud and we're convinced cloud adoption is essential for law enforcement.
Complicated Setup
Businesses usually migrate cloud applications due to the prospect of the low initial investment and zero provisioning cost, in addition to the on-demand convenience of launching the latest cloud solutions.
Let us consider a business looking to implement a performance marketing campaign. What is the performance marketing definition? Essentially, marketers pay publishers who promote products depending on the results achieved.
Fortunately, businesses can use SaaS platforms with functionalities such as powerful analytics tools that help track offers and optimize targets. And new startups can deploy these cloud-based solutions straight away.
However, if you're looking to migrate your business, the initial migration can sometimes be a complicated process with teething problems. And it will most likely take time to recode your apps and reformat your data to sync with your SaaS platform.
When performance marketing aims to improve your ad reach and conversion rates with an efficient ad spend, a long lead time could undermine these ambitions and bring up costs.
Businesses must be discerning with whom they entrust their migration strategy to - depending on the stage their business is at and their priorities for their IT ecosystem.
Strategies
Speaking of strategies, let's briefly consider a few open to business.
Retire
One strategy is to turn off applications that are no longer needed or in use. Applications sometimes get replaced by apps with upgraded functionality, sometimes when mergers and acquisitions dictate.
The retiring strategy allows businesses to save on license costs and application infrastructure.
Retain
An alternative is retaining applications as they are. This strategy is often a solution for legacy applications unsuitable for cloud migration due to running on older operating systems.
Lift and Shift
Companies looking to migrate their applications quickly can use a strategy known as lift-and-shift, which allows companies to migrate applications as they are from their onsite environment to the cloud.
The process is straightforward and allows companies to lift-and-shift applications and their configuration while minimizing any risk of something going wrong. However, there is limited ability to address any performance issues of an old on-premise environment.
Lift and Reshape
Another strategy of cloud migration is replacing onsite services and technologies with similar cloud services is called re-platforming.
Here, businesses use specialized cloud services that enable them to gain a significant amount of the benefits of cloud transition without refactoring. While this process uses automation and is without risk, it requires planning and education of the team using the new services.
Re-architect
Re-architecture refers to the migration strategy requiring you to redesign a monolithic application to be cloud-native. The re-architect is an advanced strategy that delivers significant benefits, including new features that allow you to monitor the health of your system, as well as the standard cloud migration benefits.
The drawback of such a migration is the time, planning, and knowledge of cloud services that this complex strategy entails.
Re-purchase
Finally, companies can replace their existing software with SaaS options (VIDIZMO also offers a ready-to-deploy SaaS application for smaller teams).
Such a re-purchase strategy involves replacing old software with the modern version in the cloud and thus lends itself to fast migration – for instance, solutions enabling companies to keep up with new trends in personalizing websites.
Source: Deloitte Analysis of Quarterly and Annual Financial Statements
Over to You
Businesses are increasingly awakening to the benefits of the cloud, such as improved efficiency, scalability, cost control, and greater agility and flexibility in responding to an evolving business landscape.
All the same, this technology does have its downsides. From the risk always inherent in outsourcing solutions to the level of internet service needed for distributed teams. There are many moving parts to consider.
Businesses should reflect on the pros and cons we've outlined above when they think about making their move.
This article was submitted as a guest post by Grace Lau, who is the Director of Growth Content at Dialpad, an AI-powered cloud communication platform for better and easier team collaboration and some use cases are for contact center training. She has over 10 years of experience in content writing and strategy. Currently, she is responsible for leading branded and editorial content strategies, partnering with SEO and Ops teams to build and nurture content.