Benefits and risks of cloud computing

With the ability to store data, run applications or collaborate with others, cloud computing is a flexible and reliable option for many. Some of the benefits that make cloud computing an attractive proposition include:

• Cost – cloud solutions generally require little or no up-front investment in additional hardware or software and can reduce the burden of supporting internally-hosted systems (both in terms of the infrastructure and the teams required to manage it).
• Software updates – fixes and enhancements to cloud software are typically deployed to all users at the same time (and often at a higher frequency than desktop-based software), which reduces compatibility or security issues stemming from users with different versions of the same software on different devices. Deployments are typically ‘silent’ meaning minimal or no system outages during updates.
• Fast and flexible deployment – whether it is the initial implementation or the subsequent scaling up or down of users, storage, or processing. These can all be done in minutes and again with minimal impact on system uptime. 
• Data accessibility – most cloud software requires only an internet connection and an app or supported web browser. This makes it easier for business continuity when staff move between home and office working. Organisations with cloud-based infrastructure are much better placed to support hybrid-working in a post-pandemic world.
• Integration of systems – cloud solutions (especially Platform-as-a-Service – PaaS – and Software-as-a-Service - SaaS) – typically provide a various tools ‘out of the box’ to support the exchange of data and information with other systems. These are known as connectors or APIs (Application Programming Interfaces), which allow two or more applications to talk to each other. Integrating between different cloud-based systems is usually much easier than on-premise solutions, as these can require additional hardware or software to facilitate integration, and it is rare for integrations developed by cloud solution providers to break when the solution is updated.
• Security – cloud-based solutions come with the support of providers. Providers have various measures and dedicated resources in place to protect systems and monitor for suspicious activity in real-time at a scale that most organisations would struggle to replicate. Cloud solutions also receive regular updates and protection against the latest threats in a way that legacy, on-premise solutions often do not. Some cloud solutions have built-in backups and failovers, meaning that if there is an issue in the primary datacentre, there is continuity of service via a secondary location. The threat from breaches of physical security is also reduced by individual organisations simply having less physical infrastructure that needs protecting. Security is instead the responsibility of providers who have established capabilities and, in most cases, industry-recognised security certifications.
• Data privacy - modern cloud-hosting environments can identify and ring-fence highly confidential data for additional levels of security in a way that can often be harder to implement in smaller-scale, locally hosted solutions. For example, individual files or folders can be tagged as confidential, where  additional access and retention restrictions are enforced with a few clicks. The security and privacy risks associated with the manual movement of data files are reduced because cloud platforms usually enable better, automated integrations between solutions. Some cloud solutions can even provide row and column-level security for data, restricting access to specific sections of data instead of the ‘all or nothing’ approach commonly found with on-premise data storage solutions.
• Skills to manage software - with SaaS offerings, you can rely on the infrastructure and expert support of the cloud-service providers. While some may prefer to set up a small team of IT specialists looking after an in-house system, an in-house team is unlikely to be able to match the resources of global cloud-hosting organisations without significant investment in resources. Cloud-service providers also offer a range of support that can be tailored to the needs of the business.
• Data availability - ‘Cloud-powered’ companies are generally better placed to make use of the data they have at their disposal – very much an ‘always on’ approach to business intelligence – which can lead to improved decision-making. The ability to integrate powerful data analytics, and increasingly AI technologies, into business strategy and processes with flexibility and agility, is often much harder to achieve with on-premise solutions when compared to the use of cloud services.

While most organisations have now embraced cloud computing to some extent, PwC’s Cloud Business survey has found a difference in benefits experienced between businesses that run parts of their businesses in the cloud, and businesses that have used the cloud to transform their entire business. Companies that fully embrace cloud technologies are more likely to experience overarching benefits including increased productivity, agility, and improved profitability.

There are some important risks too, including the following. 

• Access management – as cloud software can often be accessed anywhere, at any time, it becomes more important to have robust access controls. Appropriate password management can be critical.
• System updates – the risk relating to system updates in the cloud is awareness of the changes being made. When you have control over the release of updates, you can control the messaging around what those updates are and how they impact people. If updates are deployed by the vendor on their schedule, it may cause service interruptions at inconvenient times, and can lead to lower awareness of key changes to system functionality, unless that education is pro-actively managed.
• System outages – while cloud outages are rare and often short-lived, they can be catastrophic when they occur, and can be hard to predict and plan for.
• Relinquishing ownership – much like any outsourcing agreement or use of third parties to provide services, by utilising cloud services you are relinquishing control for an aspect of your technology environment. This can be liberating, in that some risks and responsibilities are outsourced, but can also be difficult to manage, particularly if things go wrong and customers or clients hold you responsible for something that you have no control over. 

These risks should not detract from the significant benefits that cloud-based solutions can bring, but form part of the general considerations for software implementation.