Today’s businesses increasingly rely on cloud services to support infrastructure (servers, storage, databases, networking), software, or services to support flexibility, performance, scalability, innovation, and to provide for cost efficiencies.
The global pandemic has accelerated digital transformation, with 90% of organizations noting cloud usage has accelerated due to COVID-19 in order to support remote work, meet the demand for personalized customer experiences, and support system reliability. By 2026, Gartner predicts that public cloud spending will exceed 45% of all IT spending of all IT spending – up from 17% in 2021.
“Today, the cloud underpins most new technological disruptions… and has proven itself during times of uncertainty with its resiliency, scalability, flexibility and speed.” – Gartner
What is a Cloud Service Provider?
Cloud computing is the provision of services over the internet by a network of computers. A cloud service provider (CSP) or cloud platform is a third-party who provides cloud computing services to establish public clouds, manage private clouds, or provide on-demand types of cloud services.
Amazon Web Services (AWS) is currently the top cloud service provider, in terms of popularity as well as usage, accounting for 32% of the cloud share market . Other popular public cloud providers include Microsoft Azure, Google Cloud, and IBM Cloud.
What is Cloud Computing?
To understand what a cloud service provider does, let’s first break down cloud computing by type of cloud and by type of cloud service.
There are 3 types of cloud computing models that will be used to implement cloud services. These models, or cloud computing architecture, are:
- A private cloud is a deployment of cloud computing resources for use by a single organization, either on-premise or hosted privately by a cloud service provider. In a private cloud, organizations are responsible for the cost of managing the private cloud.
- A public cloud delivers cloud computing resources over the Internet. A public cloud is owned and operated by a third-party cloud service provider.
- A mix of the two options, private and public, is called a hybrid cloud model.
What is a Cloud Service?
There are four main categories of cloud services, functionalities, or cloud strategies that can be rented and delivered by a cloud service provider. These include:
1. Infrastructure-as-a-Service (IaaS)
The ownership, provisioning, and maintenance of servers, virtual machines (VMs), storage, networks, operating systems, and other resources to help organizations build and manage their operating systems, data storage, and network infrastructure. Examples include Amazon Web Services (AWS) and Microsoft Azure.
2. Platform-as-a-Service (PaaS)
One step further, PaaS provides a platform, or environment, for developing, testing, delivering, and managing software that includes servers, storage, network, and databases. Examples include Google App Engine and OpenShift.
3. Serverless computing
Building on PaaS, serverless computing adds additional services to handle the management of infrastructure and services including capacity, set-up, and server maintenance. Examples include Google App Engine, AWS Lambda, IBM OpenWhisk and Microsoft Azure Functions.
4. Software-as-a-Service (SaaS)
In SaaS, a software provider hosts and delivers a software application, and its underlying infrastructure, to users over the Internet.
Why Use a Cloud Service Provider (Benefits & Challenges)
The increased market pressure, from competition to consumer demand, has required that businesses look for ways to become more flexible and agile. At the same time, cloud platforms have helped spur innovation and create cost efficiencies. Let’s take a look at the common reasons organizations to turn to cloud services:
Benefits of Using Cloud Platforms
The benefits of using cloud platforms include:
1. Cost Saving
Cost savings typically come in the form of pay-as-you-go pricing, so you are not paying for services or bandwidth unless you need it, but cloud service providers also reduce internal IT costs (capital investments, IT time) and energy costs and result in a higher level of employee productivity.
2. High Speed
Scale-up as needed, leaning on IT resources for all or part of the infrastructure for a cost-effective approach to surges in bandwidth requirements.
3. Backup & Restore Data
Cloud service providers can be used as an alternate backup plan to protect against natural disasters, power sources, or other failures. Most CSPs will create redundancy in backup plans to protect against regional disruptions.
4. Server’s Operating System Software Patches and Updates
Cloud service providers assume the responsibility of updating software, including regular updates and security updates.
Steep competition and increasing use of cloud services has placed performance and reliability as top factors among providers. Organizations moving to the cloud can usually rely on greater uptime and 24/7 support.
Cloud computing provides access to information and services to support the anytime, anywhere workforce. This need is particularly acute with the evolution of today’s remote and hybrid workforces.
7. Unlimited Storage Capacity
On-premise you are limited to the infrastructure you can buy or maintain. In the cloud, you can lean on a nearly unlimited storage capacity, only paying for what you need or use at the moment.
8. Quick Development & Deployment
Organizations can quickly take an idea from design to development with the delays of building up new infrastructure. Additionally, PaaS and serverless cloud service providers provide full development services and tools, including a testing and debugging environment.
“The economic, organizational and societal impact of the pandemic will continue to serve as a catalyst for digital innovation and adoption of cloud services,” said Henrique Cecci, senior research director at Gartner. “This is especially true for use cases such as collaboration, remote work and new digital services to support a hybrid workforce.”
Challenges of Using a Cloud Service Provider
The challenges of choosing a cloud service provider include:
1. Performance can vary
While every cloud service provider is going to make promises on performance and availability, actual performance may vary.
2. Technical Issues
Any new technology requires both the presence of experienced IT staff as well as training for anyone using the new service. However, some cloud service providers are more user-friendly overall or have features to make setup, migration, or use easier.
3. Security threat in the cloud
Cloud computing increases fears of cyber-attacks, increasing the attack surface beyond the perimeter of the organization. However, security can be improved by finding the right cloud service provider and taking an active part in shared responsibility, particularly around access and identity-proof authentication.
4. Lack of Support
Some cloud providers may lack the documentation or support staff to support customers, instead of focusing greater staff on sales, so be careful in the choice of provider.
How Do I Choose a Cloud Provider? Factors to Consider
The cloud computing market is flooded with a number of cloud service providers. While Amazon (AWS), Microsoft (Azure), and Google (Cloud) are the three leading cloud platforms, according to the Gartner’s Magic Quadrant and market share, sometimes a niche provider is a better fit.
Ultimately, organizations should consider the following factors in choosing a new cloud provider(s):
Consider the cost of use (upfront, pay-as-you-go) alongside whether there are any minimums associated with cost, any volume discounts, any reservations on service that can be made or type of billing (e.g. by hour/month, execution, user, or gigabyte). Also, weigh the cost against other factors. For example, AWS has innovated its engineering of CPUs to be able to offer the best price/performance against all counterparts. Many cloud providers will offer aggressive pricing to first time-customers, so pay careful attention to fine print about price increases over time.
2. Security & Reliability
Organizations must consider factors such as robust security as well as the resiliency of the provider, with particular attention paid to regional capabilities / historical figures on uptime. Clearly document disaster recovery provisions, backup/restore, integrity checks, and the roles/responsibilities of each party. Most cloud service providers will detail security features (free or paid) or integrations available. Look at specific areas including identity management, access controls, authentication, and where data will be stored or processed.
Organizations need to consider the implications of federal, state, and industry regulations when it comes to choosing a cloud provider. Cloud providers often have a statement of shared responsibility for compliance and should be able to answer questions about compliance with specific regulations. Certain regulations may prohibit the storage, transfer, or processing of customer data to cloud providers whose data storage capabilities lie within a geographic boundary or may have specific requirements around protection, confidentiality, or access controls. Each regulation also has specific requirements around breach response and reporting.
Cloud can be leveraged in healthcare for the back-end, data sharing, or for patient-facing applications as long as the infrastructure and all its parts and integrations are HIPAA compliant in terms of administrative, physical, and technical safeguards. The vendor must be willing to sign a business associate agreement. HHS provides guidance on HIPAA & Cloud Computing here.
GDPR covers organizations that are in the EU, or process data of, EU citizens with specific requirements on data protection, records of processing, and security of processes. GDPR requires that data storage and processing occur within EU data centers and places specific restrictions on data transfers outside the EU.
In order to be ISO compliant, a cloud service provider must be able to demonstrate certifications including ISO 27001 (for information security management systems) and ISO 27018 (code of practice for protection of personally identifiable information in public clouds acting as PII processors). ISO standards apply to any organization in more than 160 countries.
4. Tools & Features
Each cloud service provider will offer different features as part of the base capabilities or include others as add-ons. Look for both types of service (PaaS) as well as specific features around computing resources, monitoring, security, deployment features, and even user experience. According to Gartner, Microsoft currently leads in terms of the broadest range of capabilities for Saas, PaaS and IaaS.
5. Business Compatibility
The cloud service provider must match the business, technical, and operational goals of the organization.
Consider how the cloud architecture incorporates existing technology or services within the organization, as there are both technological as well as cost synergies to staying within large ecosystems such as Microsoft, Amazon, or Google. Ensure the chosen cloud provider can support current and future needs, looking at multi-cloud and microservices support container capabilities, and serverless options.
7. Contracts, Commercials & SLAs
Contracts and SLAs should be reviewed carefully and amended if needed. Ensure the SLA includes a penalty or exit clause for unmet service levels. Given the experiences of COVID-19, many organizations are also writing in force majeure clauses.
8. Migration Support, Vendor Lock in & Exit Planning
Vendor lock-in is a serious concern, either by contract or by proprietary technologies, which is why Gartner reports that some cloud providers are pressuring annual spend increases at contract renewal time. One way organizations are responding to this risk is by using more than one cloud service provider and being wary of proprietary technologies that can lead to lock-in.
9. Data Migration Support
Examine each cloud provider for the services it offers for migration. Most cloud service providers have assessment tools to assist in migration, with specific tools to support database, server, or application migration.
10. Data Governance
Cloud governance outlines the policies and controls applied to cloud services in areas of privacy and security as well as to cost usage. For example, these controls would set a maximum spend for an organization or department for cloud use to prevent the overuse of cloud resources.
11. Project Size
The size, scope, and goals of the project will place different requirements on the cloud service provider.
One of the most common reasons why a cloud migration could fail is a lack of planning: having insight about the business needs, the pros and cons of various cloud service providers, and the experience to build for the cloud today. Many of these common cloud failure problems can be solved with the help of a reliable partner.
Net Solutions can help walk you through the process of selecting the right cloud service provider for your needs, whether a part of a digital transformation or getting your startup off on the right foot. Net Solutions has full-scope teams who understand cloud technology to help you design and build solutions to create efficiency, flexibility, scalability, security and cost savings.
We use leading-edge technology and the best of all private, public, and hybrid cloud services for business-driving results, and our dedicated team of cloud-based app developers has the skills required for the job. Plus, you can get on-demand and self-service IT support for your cloud-based apps, including full-scope services such as efficiency audits, SLA management, and oversight of all critical elements for your cloud-based business.
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