In the beginning, organizations always processed data on-premises. Or did they? You might be surprised to hear that cloud computing is a concept that dates back to the 1950s, when the concept of shared, centralized resources was born.
But it wasn’t until the mid-1990s that enterprises formally “discovered and sometimes leveraged what is now cloud computing with the emergence of applications delivered over the Internet, or sometimes through private network connectivity,” said David Linthicum, Chief Cloud Strategy Officer. at Deloitte Consulting. “This was the emergence of what is now software as a service, which was truly powered by the key SaaS innovations that provide businesses with applications delivered over the open internet using browser interfaces.”
Since then, the cloud has added platform as a service and infrastructure as a service, which began to take off in 2006, he said.
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Cloud permeates the enterprise
The idea of being able to reduce or eliminate hardware and other operating costs became attractive to enterprises, with many moving to subscriptions SaaS to replace expensive, on-premises systems.
Even before the global COVID-19 pandemic forced companies to switch to remote working, there is no doubt that cloud computing has significantly changed the way businesses work.
“There are few absolute certainties in technology, but one topic that is beyond discussion is the fact that cloud computing has permanently changed the way IT is deployed and used within businesses,” said Anurag Agrawal, founder and chief global analyst at research consultancy Techaisle. .
According to Agrawal, the cloud made its way into the enterprise before the Great Recession, as companies struggled with key constraints, including:
Infrastructure costs
To support new systems, companies had to purchase new products. These products required a detailed cost-benefit analysis, were subject to the available CAPEX budget, and typically had to be used for a minimum of three to five years, which corresponds to the depreciation cycle associated with the platform hardware.
Business process development and automation
IT had been stretched in many directions, and much of its time and budget was spent maintaining existing systems. New automation projects may not require a lot of dedicated time, but because they competed for scarce resources, the time elapsed between need identification and implementation of the new system was often measured in years.
End users are required IT for service
Technologists’ grip began to crumble as new, tech-savvy generations of end users and managers emerged, but IT still controlled the servers and networks needed to deploy mission-critical systems. In some cases, end users could turn to outsourcers for help in speeding up the queue, but they were generally limited to deploying applications to the IT infrastructure.
The ability to work remotely
Although the use of technology to enable remote working began before 2009, the concept was still something new. Employees may occasionally be able to work from home, but most workdays were in the office and few staffers worked primarily from temporary locations.
“It’s amazing to see how much the IT reality of businesses has changed,” says Agrawal. “Today, an increasing amount of infrastructure is rented, rather than bought, with OpEx funds from third-party vendors. Agility has become the watchword for new automation projects and acceptable time frames are no longer calibrated in months.”
The promise of cloud computing
The rise of the cloud had many benefits, including cost savings in infrastructure and buzzwords like scalability, reliability and elasticity. But that didn’t mean they ran into the public cloud where resources were shared between companies.
“For some business users, keeping the cloud in-house alleviates the security and privacy concerns that can arise when running critical applications and data outside of the company,” said one 2009 Wharton School article. However, cloud providers insist that data with them is more secure and less vulnerable. Companies providing storage and computing services have state-of-the-art facilities and immediately deploy security updates.”
Today, end users can get applications, infrastructure and other needed services from various online sources, and employees are tied to the corporate infrastructure by their smartphones and tablets rather than by the cables attached to their desks. Most of these changes are wholly or partly attributable to cloud computing.
Cloud infrastructure provides the foundation for OpEx-based, flexible timeframe infrastructure rental. SaaS providers can deploy new automation in hours instead of months. Mobility is less a separate initiative than a key attribute of ubiquitous infrastructure. And IT now competes for corporate IT influence and budgets — it’s no longer the “last word” on IT and business solution strategies.
Early adopters of cloud computing
Government agencies were early adopters of cloud computing, driven by their leadership in defining what cloud computing was.”
“But in terms of who adopted it widely, it was the financial institutions, such as banks, who saw the potential early on,” Linthicum said.
Banks were among the first to move to the cloud “because they had the capital to do it and they’re interested in trends,” agrees Yale Fox, an IEEE member. Other early adopters were big tech companies like Amazon, Google and Microsoft, especially around 2010, Fox said.
AWS was the first of the three major hyperscale cloud providers, which also include Microsoft Azure and Google Cloud Platform.
Early use cases and bottlenecks
In the early days, the cloud was seen as an alternative to business applications that ran in data centers, such as ERPs, CRM and accounting systems.
“It was much cheaper to use them as SaaS services than to host and maintain the applications and data ourselves,” Linthicum says. “The applications were constantly being improved and those improvements were constantly being released. So you didn’t have to wait for version releases like with traditional business software.”
File storage was another early use of cloud, Fox continued, with the advent of companies like Dropbox and Box. Cloud storage was a lot more expensive in the early days, when the concept of not running your own servers and simply clicking a button to rent space in the cloud was a novelty.
Initially, the first bottlenecks were a lack of security, which was weak with the early versions of SaaS, PaaS, and IaaS cloud providers.
“This includes support for compliance mechanisms, such as encryption, which has been a requirement for healthcare providers and insurance companies,” noted Linthicum.
Other barriers included not having corporate data in the cloud and the challenge of migrating that data, which Linthicum said was very difficult, as well as the perception that data placed in a cloud provider was vulnerable to hacking.
Migration remains an issue, Fox said, especially for organizations that don’t want downtime, but… virtualization has made it easier.
There was a misconception that data stored in the cloud was more secure, but Fox believes that’s still a tricky thing because the cloud is “so much bigger of a target. If you set up the cloud right, it can be more secure.” But Fox said that even today, when he looks at a company that has set up cloud services for itself, “it rarely gets done right. You can have so many examples of things spinning and not knowing what it is.”
Most common cloud breaches
Cloud computing has not been bulletproof. Several high-profile data breaches have occurred over the years, including:
- Yahoo and Target (2013)
- U.S. Office of Personnel Management (2015)
- Equifax, Accenture and Verizon (all in 2017)
- Marriot (2018)
- Solar wind (2020)
- Kaseya and Cognyte (2021)
Reap the benefits of cloud computing
Just a few years after its initial approval, around 1999, the benefits were better understood.
“Most of the early cloud adoption happened without the direct knowledge and approval of enterprise IT, but there were employees using their own credit card to sign up for SaaS systems,” Linthicum said. “They understood the personal benefit to them, which led IT to adopt cloud computing as a result of grassroots interest in this technology.”
Resilience, especially during the pandemic, has been another benefit of the cloud.
“If you were in the cloud and set up properly, you were much less likely to have an incident during a massive traffic spike,” Fox said.
