A bright cloud on the business horizon

New technologies have the potential to impact the business world, sometimes in more ways than first meets the eye. Speaking on 2 May at the Navigate the Cloud Summit in Berlin, Vice President and Chief Technology Officer at Amazon Dr. Werner Vogels advocated cloud computing as a technology that is already changing the way of doing business and is bound to continue doing so.

Vogels invited the companies, start-ups, and IT-savvy business people present at the summit to use cloud computing to cut costs and increase the speed and agility of their web services. This, he argued, would allow them to focus more on customer relationship and experimentation.

What is cloud computing?

Still an evolving phenomenon, cloud computing generally refers to the outsourcing of computing resources, computing power, server maintenance and security to a service provider that will deal with all the complexities pertaining to such an infrastructure. This complex infrastructure is visually depicted as a cloud, hence the name: cloud computing.

At the summit, organized by Amazon Web Services (AWS), Vogels outlined the potential uses of cloud computing services, and argued that all companies nowadays need some sort of IT infrastructure to run their internal or external processes. These technicalities, however, are more or less similar for all companies, yet expensive and resource-intensive. By using cloud computing, companies can stop spending on what Vogels called “undifferentiated heavy lifting” and focus instead on what sets them apart from their competitors, their clients, or on experimenting with new products and services.

Dr. Werner Vogels speaking at the Navigate the Cloud Summit
Berlin, 2 May 2013
photo by Ana-Maria Raus

Vogels listed the following concrete benefits of using cloud computing services:

  • cost-effectiveness: cloud services function on a pay-per-usage basis. This means the costs are flexible and versatile, ranging from cents to thousands of euros, with investments tailored to users’ needs;
  • elastic capacity of resources: cloud computing can be used for small or big projects, thus helping companies to under- or over-scale;
  • increased computing speed and agility: this can prove beneficial for any business relying on the web to provide its services.

He pointed out that there is “hardly a vertical out there that is not impacted by cloud computing,” noting that vertical markets such as media and advertising, healthcare, hospitality, financial services, transportation, or energy are already extensively using cloud computing technologies.

Media and advertising 

There is a growing need to find new ways to monetize media services, especially as ad revenues from traditional sources such as newspapers, have reached below pre-1950s levels. With the boom in mobile devices and the creation of digital content, new avenues can be used for monetization, such as: online TV services, films on demand (Netflix), integration of digital devices, and content sharing. All these routes require reliable digital and computing resources to handle, host, and maintain huge amounts of digital information. Delivery needs to be quick and rapid developments need to be followed through. This is where cloud services can offer an advantage.

Healthcare and biotechnology 

The use of new devices in health-related fields has made the collection and analysis of big amounts of data not only possible but the new standard in the industry. In genetics and genome projects for example, the estimated production of data reaches 250 TB. It would be hard to work with such big amounts of data without sufficient computing power, and this is where the cloud plays a role, as it provides the computing capacity and storage facilities necessary to deal with the size and analysis of this type of data. Companies and institutions in this sector, such as Unilever, the US Center for Disease Control and Prevention, and Cancer Research UK are already cloud computing users.

Hospitality 

Jeremy Ward, SVP of Information Technology for the luxury hoteliers Kempinski, shared insights about using cloud services in the hospitality industry. In the case of his company, cloud computing was used for data storage and to increase the company’s expansion process. Thanks to the cloud, the Kempinski group was able to spend less money and attention on IT infrastructure, and focus more on what makes it stand out: maintaining high-quality services for customers across the chain’s five starts hotels.

Financial services 

NASDAQ’s FinQloud project and the Dutch investment solution provider Robeco are good examples of how cloud computing can be used in financial services. In this particular vertical, given the high profile of the companies and the sensitivity of their services, the issues of security of data and privacy are especially important. Stephen Schmidt, Chief Information Officer for Amazon Web Services (AWS), highlighted the security measures taken by AWS to protect cloud computing users. Often times the data security provided by AWS outperforms the safety capabilities of cloud users.

Transportation, energy, and more 

Other verticals where the cloud can play a role are transportation and energy. Shell and Essent are two examples of large companies using cloud computing in the energy sector. For more information about other companies using cloud computing, the AWS website offers a number of success stories on the use of the cloud in the business world.

Cloud computing is bound to become increasingly relevant for companies in the future. With the boom in digital content, the Big Data revolution, and the integration of digital devices enhancing data generation and content sharing, more computing power and data storage will be needed. Services such as AWS respond to these needs.

One might argue that cloud computing will generate a different way of thinking about a company or business strategies. Some are already using the cloud as a tool to specialize their own services, providing cloud-oriented solutions for their clients, while others are focusing on experimenting more with their own products, outsourcing the obstacles of scalability, availability, security and complex infrastructures to the cloud.

Whatever the purpose of using such services, cloud computing is a highly versatile technical service, which is already showing its benefits for various companies and in different industries.

By Ana-Maria Raus

Ana-Maria Raus is a master’s graduate  from Maastricht University with a specialization in Cultures of Art, Science and Technology Research.

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