Article by Mike Potter, Chief Technology Officer, Qlik

Cloud computingWith so much discussion of the cloud and the trend away from traditional, on-premises solutions, it’s easy to assume that cloud infrastructure has taken over.

And while the technology has grown in popularity –global cloud services spend rose by 34% to $55.9 (c.£46.9) billion in Q1 2022, according to a report by Canalys – many firms continue to rely on on-premises solutions for core needs.

Some of this is inertia – on-premises storage once served as the gold standard, providing businesses with easy access to their information in a digitised format. There are sunk costs and established processes to overcome. But this thinking limits the flexibility that businesses need to truly scale. Most significantly, it restricts how organisations access and use their data, which hinders their ability to make data-driven decisions.

It’s now well understood that data is crucial for successful businesses. According to McKinsey, high-performing organisations are three times more likely to report that data and analytics initiatives contributed a minimum of 20 per cent to EBIT. Data is essential to cutting through the competition; it is powerful enough to answer businesses’ most prominent questions, including those they didn’t even know they had.

Leading businesses are already moving rapidly to the cloud. The question is why some firms aren’t sold on the cloud yet. I hear their concerns regularly in customer and prospect meetings – mainly that data may not be secure, or that cloud storage may not comply with industry regulations. But there is ample evidence that those concerns are no longer valid.

The tide is turning on security and compliance concerns

A 2019 survey by Unisys revealed that, among firms that had not yet transitioned to the cloud, security concerns were the reason to refrain for more than a quarter (27 per cent). On the surface, this is a valid concern – data is the most prized possession of any business, so it’s only natural that they would want to keep that information locked down as much as possible. IT leaders are scarred by high-profile stories like when Capital One was hacked, and over 100 million credit card applications and thousands of account numbers were accessed. Notably, the hacker previously worked at a cloud computing company that provided data services to the bank.

This incident raised a key concern about cloud providers and their ability to protect their customers’ data. But the industry has made great progress in improving its security to ensure that data breaches are less likely to occur. So much so that industry analysts like Gartner are confident that their efforts are paying off, estimating that public cloud Infrastructure-as-a-Service (IaaS) workloads will endure a minimum of 60 per cent fewer security incidents than traditional data centres.

A growing number of enterprises seem to agree. In a July 2021 report by Google and IDG, 85 per cent of global IT leaders said they feel secure or more secure with a cloud infrastructure. Only 15 per cent said they felt that on-premises is still safer – a sharp decline from the Unisys survey just two years prior.

Compliance is another issue causing businesses to pause on the way to the cloud, but that may not be as much of a concern moving forward. Microsoft recently explained how some cloud providers hire teams of experts who possess compliance certifications in dozens of essential and data-sensitive industries, such as healthcare and education. As more cloud providers take compliance seriously and acquire the expertise to ensure it is handled correctly, more businesses should be willing to transition more data to the cloud.

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Cloud provides advantages to every business

With a global pandemic upending how business is conducted, several organisations were ultimately inspired to transition to cloud-based storage more quickly than they had anticipated. Even financial services firms are making the switch. According to Accenture, many banking CEOs believe that if they had more readily utilised cloud technology in previous years, the early months of the pandemic would have been much easier.

These are important developments that businesses are going through. While the pandemic may have spurred a faster transition for some of the holdouts, all businesses stand to enjoy the same data benefits:

Data Governance: Users must be able to access the data they need exactly when they need it – no more, no less – but that is impossible without good data governance. Cloud storage provides the flexibility businesses need while empowering managers and IT leaders to rely on cloud analytics to make the best use of that data. With cloud analytics, businesses can govern and protect data to ensure it’s shared properly and efficiently.

Centralised Data: Scattered data – whether spread across CMS, ERP, marketing automation or any other system – leads to data silos which prevent enterprises from getting the most out of their data. Siloed data also prevents organisations from getting a clear picture of their business. Taking advantage of the cloud allows all data to be brought together safely for maximum insights and vastly superior results.

Scalability: Just as cloud storage allows businesses to scale with their needs, cloud analytics provides the same flexibility and scalability to grow with data. No new hardware purchases are needed, and no major upgrades must be initiated. This is especially important when a firm’s data needs increase based on project or temporary needs – hardware has built-in latency, where the cloud scales immediately. And when data volumes fall to previous levels, the organisation would be stuck with new hardware it no longer needs. This concern and the sunk cost aren’t an issue with cloud storage and analytics.

Maintenance: Upgrades are no longer an issue with cloud technology. Updates and upgrades are performed automatically, eliminating the need and cost for the ongoing maintenance associated with on-premises servers.

Cost Savings: Cloud technology also eliminates the risk that comes with making upfront hardware investments for on-premises servers. Better still, cloud-based solutions do not need to be maintained by an in-house expert, allowing businesses to further reduce their expenses and allow their staff to focus on more meaningful and higher-value objectives.

Don’t let your technology diminish the value of your data

Cloud storage provides a level of flexibility and scalability that traditional, on-premises solutions don’t allow, but the data benefits may be the greatest of all. Cloud technology empowers organisations to take full advantage of their data and answer all their questions – including those they didn’t even know they had – creating new and highly actionable opportunities. There are still some concerns about cloud storage, but as the industry continues to work through them, more businesses will be confident in making the switch. And when they do, they’ll be able to do so much more with their data.