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What Is Enterprise Cloud Computing? Comprehensive Guide

Michal Krzysztof v2 a28a1397a9

21/01/2022 |

13 min read

Michał Krzysztof

Enterprises today compete with many types of companies, but especially with the highly innovative startups that are disrupting every industry. That’s why we see more and more large-scale organizations embracing new technologies to build brand-new products and modernize their technology stacks. 

Microservices, cloud computing, containerization, the Internet of Things, DevOps – these are just a few examples of such approaches that are now transforming how enterprise departments work. 

Let’s take a closer look at arguably the most transformative technology of the recent decade: cloud computing. 

What exactly is enterprise cloud computing? How does it differ from other types of cloud services? Which cloud-based solutions are enterprises using today? 

This article answers all of these questions to show you how organizations around the world are now using the power of the cloud to reinvent their business models and improve their operational efficiency.

 

Table of contents:

  1. What is enterprise cloud? Definition
  2. What are the different types of enterprise cloud architectures?
  3. 3 cloud computing models enterprises use today
  4. Enterprise cloud solutions – pros and cons
  5. Enterprise cloud computing – wrap up

What is enterprise cloud? Definition

Enterprise cloud refers to a model of computing where the business can access virtualized IT resources over the internet. These resources may include servers, processing power, virtualization capabilities, networking infrastructure, and data storage. 

Why is enterprise cloud computing so important? Because it creates new opportunities for organizations to increase their flexibility, scalability, resiliency, and security when building new digital products. 

There is no organization left today that isn’t undergoing some form of digital transformation. In order for such an initiative to work, it has to be supported by flexible and scalable IT infrastructure. Processing power, computer memory, and data storage are all critical resources enterprises need to make that happen. 

In traditional setups, an enterprise would bear the costs of implementing and maintaining its networks and data centers. Cloud-based resources are accessible at a lower cost by not involving capital expenditures. And enterprise cloud service providers don’t just offer cloud services but also cloud management systems or managed services to help their customers make the most of the cloud.

 

Why are enterprises moving to the cloud?

The Flexera 2021 State of the Cloud Report showed that 36% of enterprises spend more than $12 million per year on public cloud services today. And 90% of them expect their cloud use to go way beyond their plans because of the COVID-19 pandemic. 

Enterprises choose the cloud for many different reasons. Here are several driving factors behind the rise of the enterprise cloud:

  • Significant cost savings – Cloud solutions offer pay-as-you-go pricing, which means paying only for resources you actually use. Moreover, moving to the cloud helps companies to avoid all the upfront costs of building similar capabilities in-house. There’s no physical computing or data center that needs to be bought, maintained, and updated.
  • Top-notch security – Enterprises are often targeted by cybercriminals looking to expose or steal data. Data breaches have terrible consequences for the brand reputation and impact customer relationships. That’s why organizations of that scale need to meet a lot of different security and compliance standards like system-wide identity and access management, cloud security monitoring, and network access controls. Cloud service providers are usually well-versed in securing their networks, especially if they are hyperscalers like Amazon Web Services, Microsoft Azure, and Google Cloud Platform. By investing in a service that already checks all the security and compliance boxes, companies don’t have to invest in building such capabilities in-house anymore.
  • Flexibility and scalability – Cloud computing offers teams the flexibility to dynamically scale resource consumption up or down and meet the demands of their applications. This means lower upfront capital costs associated with any event like launching a new product or testing a new service. That way, teams also get more opportunities for innovation.
  • Faster growth – Cloud technologies improve team communication and collaboration on many levels. Employees can work from practically any location as long as they have access to a good internet connection. And cloud-based solutions offer teams unparalleled opportunities for collaboration which is especially important for fast-growing and dynamic projects.

What are the different types of enterprise cloud architectures?

An enterprise cloud platform can be implemented in different ways. This is what we call enterprise cloud architecture. The architecture gives the indication about where the cloud is hosted and who has access to it. Today, enterprises can choose from four main types of cloud deployment: 

  • public cloud,
  • private cloud,
  • hybrid cloud,
  • multi-cloud.

When migrating applications and services to the cloud, it’s essential that you pick the service that meets your performance requirements but also keeps the application secure and compliant with the local regulations (and doesn’t break your wallet). 

Let’s take a closer look at each of these models to understand how they differ and what their use cases are. 

 

Public cloud

Public cloud services are offered by third parties, and anyone can use them as long as they pay the fee. Hyperscalers such as AWS, Microsoft Azure, and Google Cloud Platform are the three major cloud service providers today. 

All of their customers get to share the services and infrastructure they provide. It’s their job to host and maintain all the public cloud services. These providers usually have massive data centers located all around the world. 

They have not only huge volumes of storage space but also a great number of virtual machines teams can use in order to run operations that require a lot of computing power – for example, training a machine learning model. 

Public cloud vendors usually offer several pricing models with pay-as-you-go as the most flexible and scalable one. These providers also ensure the high security of their services and provide a disaster recovery plan. 

Naturally, by using a public cloud service, you’re passing over the control into the hands of the cloud provider. Potentially, you’re facing the challenge of vendor lock-in. This means that changing the vendor will be incredibly difficult because of a lack of interoperability or very high fees for moving data out of the service (egress fees). 

What if your provider goes out of business? That’s not a very likely scenario for a hyperscaler, but a smaller provider might go bankrupt and force you to make quick changes in your infrastructure. 

 

Private cloud

A private cloud is a cloud that’s not publicly available. The idea is that a single enterprise only can use a private cloud – and only authorized users can access it. Still, it works like a cloud, so it means that resources can be accessed from anywhere, just like in the public cloud. 

Driven by compliance and security requirements, many enterprises choose to develop an in-house private cloud. Others instead choose to partner with managed service providers that host and secure the infrastructure. Major vendors like AWS offer services like that called dedicated hosts. 

Private cloud solutions give you full control over what’s happening in the infrastructure. You can restrict access to assets and move data and applications wherever you want and whenever you want. You won’t be threatened with any sudden changes made by the provider. Still, if you choose to go with a managed service, you will also get technical support from the vendor and a disaster recovery plan. 

Private clouds are pretty expensive to build. You can only expand them by adding more hardware and capacity to your data center. This means that the scalability of the cloud is difficult to achieve in this scenario. 

 

Hybrid cloud

The hybrid cloud model is an increasingly common enterprise cloud solution model. It's a combination of public and private clouds. Hybrid clouds are popular because they allow both deployments to interact smoothly with each other. For example, you can keep sensitive data in the storage on a private platform but then move it to a public cloud service so that it’s processed. 

Building the integration between two clouds is quite challenging, but you get all the benefits: the incredible scalability of the public cloud and the security of the private solution. 

 

Multi-cloud

According to Flexera’s 2021 State of the Cloud Report, respondents use 2.6 public cloud services. Today, 92% of enterprises already have a multi-cloud strategy in place, and 82% of them have a hybrid cloud strategy. 

What does this mean? That enterprises are innovating their cloud service use – and hybrid and multi-cloud are great examples of that. 

A multi-cloud infrastructure combines different services from more than one cloud vendor. Such a setup can be based on multiple private and public clouds. For example, an enterprise might use a public cloud service from AWS for training a machine learning model but use Google’s service for running Kubernetes containerized applications and storing data in a private cloud for top security. 

The great advantage of multi-cloud is that it allows specialization and versatility. Different teams within an enterprise might have completely different cloud requirements. For some, security is the most important aspect. Others will value scalability and flexibility more. 

Why close them in one scenario when you can make the most of the cloud services available and avoid the vendor lock-in problem at the same time?

3 cloud computing models enterprises use today

Organizations around the world are leveraging different cloud resources that can be roughly grouped into three different categories: 

  • Software as a Service (SaaS),
  • Platform as a Service (PaaS),
  • Infrastructure as a Service (IaaS).

Let’s take a quick look at them to see how they differ from one another. 

 

Software as a Service

SaaS is fully developed software that is available to end-users over the internet, most commonly upon buying a subscription. It’s up to providers to manage their infrastructure, all the operating systems, and data in order to deliver the working program to the enterprise. 

Such software needs to be available on-demand whenever customers need to use it. A lot of these applications actually run in web browsers, meaning that you don’t have to install or download anything. This makes them very scalable and flexible.

 

Platform as a Service

PaaS is a range of solutions that provide teams with frameworks to build, test, deploy, manage, and update their software. A good example of a Platform as a Service solution is Google App Engine that teams use to make the process of building new software easier. 

 

Infrastructure as a Service

IaaS is located at the base of the cloud service model, and it’s the most flexible kind of service available on the cloud. By investing in IaaS, you get an entirely virtualized computing infrastructure managed over the internet. 

The provider manages that infrastructure in their own data center – this may include enterprise cloud servers and the stored data. You can customize the infrastructure to match your unique business requirements as well.

Enterprise cloud solutions – pros and cons

Pros of enterprise cloud computing

1. Lower costs

Cloud computing helps organizations to reduce their IT costs because it’s up to the cloud provider to manage all the underlying infrastructure that includes both software and hardware. That way, the engineering team can focus on mission-critical tasks like building the product instead of setting up and managing the infrastructure. 

2. Accessibility

Public cloud services are global, convenient, and fully accessible to anyone. Thanks to this, enterprises can accelerate their digital transformation initiatives and build software applications faster. 

It’s thanks to the cloud that teams get resources for experimenting with technologies like containers, microservices, serverless computing, Big Data, the Internet of Things, machine learning, and much more. Practically every public service provider offers managed services to help teams make the most of these technologies. 

3. Unlimited storage space

Public cloud services provide a lot of storage that comes at a much lower price than purchasing hardware and building a data center. Instead of building, maintaining, and administering a data center, you can leave the task to the cloud provider. All you need is to trust the provider to do the job really well and get the right service-level agreements (SLAs) and quality assurance. 

4. Greater collaboration and employee mobility

Since employees can access cloud-based applications, data, and files practically from anywhere and from any device, your work cannot continue in any context. You can only imagine what impact such preparedness had on organizations during the COVID-19 pandemic when suddenly local regulations forced people to stay at home. All the companies that didn’t include cloud-based solutions in their workflows and processes suffered downtime because of that. 

 

Cons of enterprise cloud computing

1. You become dependent upon the internet connection and your provider

Most telecommunication providers offer an exceedingly high uptime. However, there is always a possibility that downtime or a natural disaster happens that has an impact on internet connectivity. This means that you might be cut off from your business applications. 

Similarly, you also might become dependent on your cloud service provider. If the provider suffers downtime, your applications go down with it - unless you’ve prepared for that by developing a multi-cloud strategy. That’s why it’s so important to always have a backup plan.

2. Moving data might be difficult

It’s easy to store data in the cloud, but moving it out of the service might come at a cost. Egress fees can be pretty steep, and many companies have experienced that. 

An internal document leaked from AWS showed that Apple was charged $50 million in data transfer fees in one year. Pinterest egress fees went over $20 million, and Netflix and Airbnb were charged over $15 million. Ingress and egress come with their own rules and limitations that teams have to abide by, and there’s no way out of it. 

3. Cloud management is tricky

Cloud computing management refers to the management of all the different systems that make up your cloud infrastructure. This means issues like security, availability, and privacy. Next, you need to get standardized service level agreements (SLAs) and deal with many cost management and optimization parts of your cloud setup.

4. Vendor lock-in

By hosting your business applications in the public cloud, you run the risk of locking yourself in with the services. Cloud providers make things difficult, even if you’re using open source solutions like Kubernetes. 

That’s why it’s important to team up with cloud experts before considering a migration. You don’t want to lock yourself into a deal that turns out to be insufficient a few years down the line.  

Enterprise cloud computing – wrap up

Just like any other technology, the cloud comes with its pros and cons. But enterprises that are looking to accelerate their operations have no other choice than to embrace it. There’s no time to waste, and teams need to be equipped with scalable and flexible resources to drive innovation and deliver amazing products to their customers. 

If you’re an enterprise looking to build a strong competitive advantage in a market full of other enterprises and disruptive startups, not being in the cloud is a serious disadvantage. 

We hope that this article showed you the value of cloud computing technologies and opened your eyes to all the different options available for enterprises. 

Before migrating into the cloud or developing a new cloud strategy, it’s smart to get in touch with a team of cloud experts who can take you through the process step-by-step and help you avoid all the pitfalls and dangers of the cloud. Contact us to see how easy your cloud journey can be!

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Michal Krzysztof v2 a28a1397a9

Michał Krzysztof

Bussiness Development Manager at Codete

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