Cloud Technology in Digital Transformation
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Cloud Technology in Digital Transformation
Technology description
Cloud technology, generally called cloud computing, is the on-delivery of computing services like servers, storage, databases, networking, software, analytics, and so forth over the Internet. Therefore, this approach offers the organization the use of resources at remote locations, saving the organization the cost and hustle of the ownership and running of physical servers and data centres. Using cloud technology empowers users to access a wide range of computer resources on an on-demand basis, thus increasing the pace of innovation, resource scalability, and the economy of scale. Pay only what one uses: business reduces running costs significantly and leverages more efficient and scalable IT.
Service Models
The basic service models of cloud computing include different needs. Software as a Service (SaaS) offers applications over the Internet and simultaneously eliminates the need for the user to procure infrastructure or directly manage it internally. SaaS applications are literally “software as a service.” This means they are broadly accessible and subscription-based, providing applications such as e-mail, customer relationship management, and other types of business work. Infrastructure as a Service (IaaS) provides virtualized physical computing resources over the Internet that feature more flexibility and resource control than SaaS. It is ideal for companies needing wide control over the environment without investing in physical hardware. Finally, PaaS or Platform as a Service provides cloud infrastructure and services required to facilitate the complete life-cycle of the development and delivery of web applications and services completely from the Internet without the cost and complexity of building and maintaining the underlying infrastructure.
Deployment Model
In deploying cloud technology, several models should explain how resources are handled and controlled and who can access them. The public cloud is a multi-tenant environment where the user can share computing resources with different users, exiting from a pool managed by the cloud provider. It offers very high scalability and flexibility at a lower cost. Conversely, a private cloud belongs exclusively to the organization running and managing it, so its control allows better security and control. A hybrid cloud combines public and private clouds, thus enabling an organization to share data and applications with clouds that offer businesses more flexibility and a broader deployment of its options. Using multi-cloud services from different providers increases resiliency to outages and effective operation with the multi-cloud approach, hence avoiding vendor lock-in.
The basic attributes of cloud computing usually encompass scalability and elasticity, high availability and disaster recovery, and rigid security features. Scalability can define the IT system in a manner that would allow it to experience expansion or contraction of its usage of resources to accommodate the dynamically different loads. These automatically scale resource use to remain effectively utilized without incurring extra costs. Besides, the system should be designed with high availability and disaster recovery to remain functionally operational in various failure scenarios and minimize possible disruptions. Cloud computing is paramount, with providers putting rigorous security protocols toward data integrity and privacy, making it a reliable choice for organizations handling sensitive information.
Vendors
Still, by 2024, three companies will continue to rule the world of cloud infrastructure: Amazon Web Services (AWS), Microsoft Azure, and Google Cloud. This has dropped slightly over the years, but AWS still leads the pack with about 31% of the market, as per Statista (2023), which is clear. After that, Microsoft Azure has about 24% of the market share and is experiencing strong growth. This gives Google Cloud an approximate 11% share, firming its spot as the third giant in this competitive arena.
Even the global cloud infrastructure services market is depicted to have robust growth, with total spending estimated to have reached around $73.7 billion by the end of Q4 2023 (mordorintelligence.com, 2023). This is a big jump from prior years, and it is being boosted by the growing adoption of technologies like generative AI, which is now emerging as a new frontier for many cloud providers.
Other big names in the market include IBM Cloud, Oracle Cloud, Salesforce, and Tencent Cloud, all with smaller market share percentages. For example, IBM stands at about 3%, Oracle at 3%, Tencent at 2%, and Salesforce at about 2% (Miller, 2024). These are smaller companies than the three at the top. However, they still play an important role in specific segments and geographical positions, contributing to the cloud market’s variety and resilience.
Besides, the cloud market is expected to grow due to the increased adoption of AI and machine learning, the growth of digital transformation initiatives, and the shift to hybrid and multi-cloud environments (Markets and Markets, 2024). The largest growth is expected in edge computing, improvements in security, and increased industry-focused cloud offerings.
Figure 1: Global Cloud Infrastructure Market Share
Source: (Statista, 2023)
Users of Cloud Technology
BFSI (Banking, Financial Services, and Insurance) and manufacturing are the other verticals witnessing notable gains from the shifting cloud computing landscape with strong metrics from the ground. With the upsurge in online banking activities, the BFSI sector is expected to hold a market share of over 20% by 2022. Cloud computing has been instrumental to BFSI institutions in enabling many innovations aimed at customer relationship enhancement through eased-up services to conduct fund transfers and those related to digital wallets (Grand View Research, 2023). They also enhance these institutions’ flexibility and cost efficiencies in managing and analyzing large volumes of customer data, which is essential for compliance and service delivery.
Figure 2: Cloud Market Share by End-Use
Source: (Grand View Research, 2023)
However, the highest cloud adoption growth is projected for the manufacturing industry. In collaboration with IoT, AI, and ML technologies, cloud computing is expected to immensely help the manufacturing sector in better data management and real-time operational visibility. Cloud platforms support key manufacturing processes like enterprise resource planning and supply chain management to increase productivity and operational efficiency. In so doing, the offered cloud services make the solutions they provide scalable and thus foster the continued innovation and competition of such services.
Geographically, North America held the largest market share, over 35%, in 2022. This is a testament to its strong digital infrastructure and prevalence with major cloud providers such as Amazon, Google, and Microsoft. Further, the Asia Pacific region is expected to witness the highest growth rate due to technological improvements in the region’s major economies, namely India and China, and strategic data centres made by global cloud giants to meet local data sovereignty requirements.
Value Chain Activity
Cloud computing has several deep implications within an organization across most of Porter’s value chain activities. Operations, outbound logistics, marketing and sales, service, and technological development are among the most impacted.
Operations: Cloud technology brings about operational efficiencies in the manufacturing and BFSI industries, including streamlined enterprise resource planning and better supply chain management (Cheng et al., 2022). The cloud-based platforms enable real-time tracking and adaptation of the manufacturing process to realize higher productivity levels and minimize downtime. In BFSI, day-to-day activities with improved processing capabilities and faster transaction processing bring operational excellence to the forefront.
Outbound Logistics – Improved control and inventory monitoring can be made using cloud computing for improved data analytics and storage solutions. This, therefore, allows for precise forecasting of demand. On the other hand, managing inventory is critically important to reduce overhead costs and improve delivery time. Data from the cloud service will aid logistics managers in making effective decisions by optimizing the distribution and routing strategies.
Marketing & Sales: Enhancing marketing and sales, cloud services enable the boosting of storage with data analysis, customer relationship management (CRM), and the facilitation of specific marketing activities or promotions (Ansari et al. 2019). An example of such systems is the cloud-based CRM systems, which enable companies to understand their clients well through appropriate segmentation in marketing, targeting marketing, and keeping performance records of their sales. The systems also help with easy communication and information sharing for efficiency among sales teams.
Service: Under the service part of the value chain, cloud computing delivers platforms that improve service operations and sustain services. What distinguishes cloud-based contact centre solutions, such as Five9’s, is their ability to improve the prowess of dealing with customer interaction across diversified channels with a shortened response time, enhancing customer satisfaction (Copley, 2024).
Technology Development: Cloud computing offers many advantages for R&D work since it allows for scaling resources that could be used for testing and development without any huge capital investment in hardware. Companies can also use cloud environments to pilot new products, simulate user experiences in various environments, and roll out new updates much faster and more efficiently.
These activities are what the strategic advantages of cloud computing are all about since they increase organizational efficiency due to more scalability, flexibility, and cost management. This broad application through the value chain underscores the pivotal role that cloud technology plays in modern digital transformation strategies.
Business Process
Sales Lead Fulfillment Process Using Cloud Technology
As given below, the swim-lane diagram is designed to organize and improve the lead fulfilment process by presenting the roles and interactions between different departments or persons in generating, tracking, and converting sales leads. This diagram aids in mapping these responsibilities so that the efficiency and effectiveness of using cloud technology to streamline lead management operations are optimized.
References
Anshari, M., Almunawar, M. N., Lim, S. A., & Al-Mudimigh, A. (2019). Customer Relationship Management and Big Data enabled: Personalization & Customization of Services. Applied Computing and Informatics, 15(2), 94–101. ScienceDirect. https://www.sciencedirect.com/science/article/pii/S2210832718300735
Cheng, M., Qu, Y., Jiang, C., & Zhao, C. (2022). Is cloud computing the digital solution to the future of banking? Journal of Financial Stability, 63, 101073. https://doi.org/10.1016/j.jfs.2022.101073
Copley, B. (2024, March 19). Five9 Aceyus VUE: The cloud-based contact center data integration solution | five9. Www.five9.com. https://www.five9.com/blog/five9-aceyus-vue-cloud-based-solution-contact-center-data-integration
Markets And Markets. (2024, February 20). Global Cloud Industry Outlook 2024. Www.marketsandmarkets.com. https://www.marketsandmarkets.com/blog/ICT/Global-Cloud-Industry-Outlook-2024
Miller, A. (2024, March 29). Ten of the biggest cloud providers in 2024 and their market share. ReHack. https://rehack.com/culture/biggest-cloud-providers/
mordorintelligence.com. (2023). Cloud infrastructure services market size, growth | 2022-27 | report. Www.mordorintelligence.com. https://www.mordorintelligence.com/industry-reports/cloud-infrastructure-services-market
Statista. (2023, April 28). Infographic: Amazon dominates the public cloud market. Statista Infographics; Statista. https://www.statista.com/chart/18819/worldwide-market-share-of-leading-cloud-infrastructure-service-providers/