Sizing the cloud: How to adapt service subscription to your company size?July 25, 2017
Using the cloud to scale
Building a business in today’s day and age means adapting your company to the cloud. The future is in the cloud, that much is clear, and businesses will be able to set themselves apart from one another and gain competitive advantages by how well, fast and efficiently they can integrate the many advantages of cloud into their daily operations. And one of the key areas that cloud can help you manage your business is by providing key tools that will make scaling your business that much easier.
First, let’s take a broad look at the cloud and its future. Morgan Stanley predicts that Microsoft cloud products will make up 30% of the company’s revenue by 2018. Amazon Web Services continue to climb at impressive rates, and worldwide spending on public cloud services is set to balloon from nearly $70 billion in 2015 to $141 billion in 2019.
Which is to say that investment in the cloud is only heating up, and many companies and organizations are availing themselves of the many tools and shortcuts that the cloud provides.
One of the biggest advantages of the cloud is through the ability to scale. Specifically, it can help you adapt your service subscription to match the size of your company. The way it does so is by reducing costs, creating a more efficient process and system, and allowing for easy access to vertical or horizontal scaling.
Before we go any further, let’s first go over what we mean by vertical and horizontal scaling in the cloud.
Cloud scaling: vertical vs horizontal
As I mentioned at the top, the cloud platform offers a number of boons to your company that can help you attain a better performance overall in a variety of areas. But perhaps one of the most innovative benefits of the cloud has to do with scaling.
Remember that the cloud offers a decentralized way to both process and store data, meaning that physical on-site servers can be eschewed in favour of a far less limiting pool of resources, where new servers can be called up to help anytime from anywhere.
In this way, adding more servers to help scale becomes that much easier. That is calledhorizontal scaling, where multiple hardware and software entities can be made to work together in order to help your company deal with an increasing amount of processes.
Basically, horizontal scaling is the addition of more resources to help you deal with an increased demand.
Vertical scaling, on the other hand, is about carving out more room for your processes on an already existing server, meaning that you can develop capacity, but you are limited by the size of the server.
The most fundamental distinction between the two, therefore, is that vertical scaling in the cloud involves a server with a predetermined limit that you can work your way up to but cannot exceed, whereas horizontal scaling has no theoretical limit and is the addition of new resources and servers.
With that in mind, let’s get back to how this can help you scale your business specifically in relation to a service subscription model.
Service subscription and the cloud
If you do run a business on a service subscription model, then the obvious start point is finding the sweet spot of a subscription price where you can attain the most customers with the most profitable price without sacrificing one for the other. That’s business 101. But the cloud changes that equation the moment you adopt it as a platform.
The cloud has the ability to radically redefine your costs, and if used efficiently, can lead to a far higher profit margin per customer. This would allow you to rescale your subscription price to again fit the ideal combination between a comfortable profit without having an overly prohibitive price point.
Of course, the more users you’ll have the more you’ll need to take advantage of servers to help process the increased traffic. And that’s where horizontal scaling in the cloud comes in to play.
With horizontal scaling, adding resources to your business would be nearly effortless, and certainly more cost effective than the alternative of using concrete, on-site data storage and processing services.
Vertical scaling too can help at the beginning without increasing the costs to your company, but with an eventual limit that will need to be expanded via the introduction of horizontal scaling. At least, that’s what you’re hoping for as your business expands and gains new customers and therefore puts more strain on your servers.
But the most fundamental way that the cloud will alter service subscription companies when it comes to scaling – besides saving the company money due to the more affordable processing solutions – is that the subscription price itself can be reconfigured to hit an even more potent intersection of profit and consumer-friendliness.
Cloud and the future of your business
The ability to impact subscription prices in a positive manner is just one way that the cloud is able to interact with your business and help it grow.
We didn’t even touch on cybersecurity in the cloud, which could be one of the most important considerations depending on your type of business and industry.
Or how disaster recovery is hugely important in a world where data is king. Or just how the much faster the cloud can be compared to traditional computing methods.
Which is all to say that the cloud offers a tonne of innovations that could really power your business. Scaling up and the affect that will have on subscription businesses is one of the many benefits that the new platform offers to users.
About the Author
Sean is a content specialist for an IT Disaster Recovery Firm. Sean is a dreamer, idea generator and teller of stories. Sean is also a Basketball fan, traveller, and vintage furniture lover.