Cloud Computing: Changing The Business.

Cloud computing technologies are ubiquitous. While not exactly new technologies, the speed with which they’re transforming business models and efficiencies seem to have accelerated over the past few years. The reason for the transformation depends on how the business operates and its specific needs, but there are some major trends that have emerged.

Here are few ways the cloud has changed the way business is done:

1. Push Prices Down

At its core, the cloud is a cost-saving technology: it enables data to be more easily shared, which in turn allows resources to be allocated more efficiently (companies like AirBnb or GetAround are examples of services that use cloud technologies to push prices down and improve allocation of assets). Most notably, a study conducted by the London School of Economics concluded that cloud computing makes it easier and cheaper to innovate. Cost reduction enables many other transformations, such as…

2. Greater Entrepreneurship

Just as clouds have enabled businesses to dramatically lower their cost of operations, they have by extension lowered the cost of starting a business — and thus spurred entrepreneurship. And thanks to cloud technologies and the degree of data sharing they enable, independent businesses can share their collective infrastructure costs via the cloud. Rackspace, is using our cloud technology to promote entrepreneurship via their Startup Program.

3. Small Business Partnerships

Of course, the cloud doesn’t just dramatically reduce the costs of starting a business — it also reduces the cost and difficulty of partnering with other businesses by making it easier to use APIs of other applications. Caterina Fake, co-founder of Flickr, has said that APIs enable a new form of business development for small businesses that makes meaningful collaboration more possible for all organizations, big and small.

4. Build a Modular Organization

Running parallel to the idea that cloud technologies facilitate small business partnerships is that they enable larger companies to create a modular organization. Prabhakar Gopalan notes that this is a manifestation of Conway’s Law, in that modular communication systems built on cloud technologies will ultimately yield modular organizations as well. Basically, cloud technology enables better participation across small teams — which in turn enables organizations to be less hierarchical and more modular, which reduces the organization’s risk against collapse of any single department of its unit.

5. Reduce Technical Barriers

Consistent with the basic theme that cloud technologies enable sharing is that they also, by extension, enable collaboration and specialization. As such, cloud technologies enable non-technical individuals to participate in and lead information systems.

Another way that cloud computing has changed business models is in the way that you interact with customers.  It gives you the flexibility to immediately react to customer needs as soon as the customer wants you to. Customers no longer wait for business hours to shop for products or get the services that they need. They expect it 24/7. Plus, they want a more robust experience that often means websites with videos, tools and interactive presentations. Most medium to small businesses don’t have the internal bandwidth to host these interactive files.

Outsourcing your interactive data to a cloud vendor ensures that you have enough capacity to not only store these files, but guarantee that customers can download or view the files at higher speeds from a secure cloud computing platform.

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