KEY POINTS

  • Cloud computing solutions have gained traction because they're flexible and cost efficient. Sixty-seven percent of companies used an Infrastructure-as-a-Service solution in 2015, like the cloud, for some part of their business, up 19% from the prior year.
  • There are three main cloud computing strategies, and each suits different business needs:
    • A public cloud is a multi-tenant environment where storage and computing facilities are pooled and shared among multiple clients.
    • A private cloud is a single-tenant environment where storage and computing facilities are pooled and dedicated to that one client.
    • A hybrid cloud strategy combines multiple distinct cloud solutions (e.g. public-private).
  • All cloud solutions provide certain benefits that are becoming increasingly essential to businesses in the digital age. These include on-demand self-service, rapid elasticity, and broad network access, among others.
  • Security needs, demand predictability, existing infrastructure, and maintenance capabilities are key business considerations for enterprises choosing between cloud implementations.
  • While hybrid cloud strategies will remain popular in the near term, the market is likely to shift toward the public cloud over time. That's because costs are falling, providers are developing solutions that address main concerns with the public cloud, and business practices like agile development and data analytics are dependent on advantages the public cloud provides. However, industries that handle sensitive information, like financial services and healthcare, will likely prefer hybrid and private cloud strategies given regulatory restrictions.
  • Amazon Web Services is the dominant cloud computing provider by market share, followed by Google, IBM, and Microsoft. Because the latter three companies have had little success taking on Amazon, market-share gains are likely to come at the expense of smaller competitors.

Introduction

Cloud computing — on-demand, internet-based computing services — has been successfully applied to many computing functions in recent years. The concept of Anything-as-a-Service, shorthanded as XaaS, has emerged to identify these types of services that are delivered over the internet rather than provided locally or on-site. From consumer-facing, web-based productivity apps like Google Docs (an example of Software-as-a-Service) to enterprise database management suites (which fall under the Platform-as-a-Service model), the tools businesses rely on are increasingly moving to the cloud.

The cloud itself, where these applications and data are stored and from which they're delivered to users, is an example of Infrastructure-as-a-Service (IaaS), which refers to the virtualization of computing infrastructure — the [...]