How Cloud Technology Changes the Way Businesses Operate

Cloud Technology is changing how business operates ... photo by CC user (public domain)

It may be premature to say that cloud technology is everywhere, but it’s only matter of time before that statement becomes reality. A growing number of businesses have reaped the benefits of this revolutionary technology, choosing to purchase software as a service (SaaS), instead of through traditional license plans.

Many companies have passed the burden of maintaining their software and IT infrastructure to cloud service providers. According to a recent IDC report, cloud computing revenue was at $56.6 billion globally in 2014 and expected to grow to $127.5 billion in 2018, a compound annual growth rate (CAGR) of 22.8 percent. These kinds of numbers are truly revolutionary as cloud technology has dramatically changed the way companies do business.

Cloud Technology Taking over CRM Market

Customer relationship management (CRM) software is a great example of how the cloud has changed the business world. The aforementioned IDC report also predicted that 50 percent of revenue in the CRM market this year will come from cloud-based versus on-premises systems.

By 2018, that number will reach 62 percent, indicating that the technology is here to stay, at least in CRM. The leading vendor in the overall CRM market (both cloud and on-premises) is Salesforce, which has always offered CRM through SaaS plans.

Cloud-Based Communications

Another area where technology is improving our lives with the cloud is in business communications. Fifteen years ago, most business communication was done by phone, email, and meetings.

While email has always been more or less ‘cloud-like,’ the other two forms of communication were traditionally handled on-premises. Phone service was setup with a PBX system with a separate room dedicated to handling the infrastructure, while meetings were generally conducted with most or all attendees in person.

Cloud technology allows companies to ditch the traditional PBX and replace it with a hosted telephone system. Businesses that choose to go this route save on the labor costs that come with maintaining and upgrading systems in house.

The technology has also opened up video communication. While it is possible to handle videoconferencing through an on-premises setup, it’s much easier to do this through the cloud. An Internet connection, some cameras, and screens are all it takes to set up a basic system.

There is more to the cloud than simply providing a better way to implement phone service and videoconferencing. It has opened up the whole field of communications methods or unified communications (UC) which can include chat, data sharing, digital whiteboards, and other collaborative functions.

The UC market is already large and will only continue to be impactful. Grand View Research estimated that the UC market would grow to $75.81 billion by 2020, growing at a CAGR of 16.3 percent between 2014 and 2020. The report also stated that cloud-based solutions were more attractive than on-premises versions.

Allowing Businesses to Focus on Core Functions and Other Benefits

Why has cloud technology become such a force in the business world? One reason is that it allows businesses to outsource non-core operations. The car manufacturer that uses a cloud-based phone system can focus on making cars instead of time and effort on what amounts to an internal phone company.

Scalability is another huge benefit. Whether cloud technology is used for phone systems, general IT or other purposes, it is a relatively simple matter to add or remove users as needed.

When software is purchased as a service, companies only pay for what they use. Traditional software, by contrast, is usually licensed by a fixed number of seats. Companies often waste money, purchasing more licenses than they need to avoid audits.

The benefits of cloud technology are too compelling for businesses to dismiss anymore, and industry reports show that it’s still growing at double-digit rates. It is not just another tech fad that the IT press is hyping. Cloud technology is for real, and it’s here to stay.