Top Cloud Technology Trends in Modern Manufacturing

The big technology companies have been talking about cloud for quite a while now; but over the past several years SaaS adoption has rapidly picked up steam as cloud technologies continue to mature, and as more small and mid-sized businesses are recognizing the benefits of shifting to cloud computing.

In this article, we will examine some of the key cloud technology trends driving modern manufacturing to transition to the cloud, and some of the important factors to consider before embarking on a migration project.

• Cloud Technology Trend 1: Borderless Companies are Here to Stay

A decade ago, remote work was still something of an anomaly. The concept of a distributed “virtual organization” began to emerge in the early 2000s; but for most businesses, face-to-face collaboration continued to be the norm. In early 2020, though, things changed dramatically as the arrival of the COVID pandemic prompted businesses to shift much of their workforce to a remote model.

The number of companies with remote workers has more than doubled. Of the companies that have adopted a work-from-home option, 55% expect that the change will be permanent. Job postings for remote work positions have increased more than eightfold in the past year.

While most organizations have been able to adapt relatively quickly to this new way of working, managing remote access for on‑premise systems requires considerable effort and consumes a lot of bandwidth. Although VPN access offers a secure path for working with applications inside the firewall, it adds to the burden of managing the overall IT infrastructure.

Cloud-based ERP, in contrast, was designed to make it easy to access information any time, from anywhere, on any device. Native cloud applications provide seamless access through secure data centers, built around a user interface and user experience that is familiar and intuitive for new hires.

• Cloud Technology Trend 2: Cloud Is the Platform for Innovation

The architecture of business applications has shifted dramatically over the past two decades. Client/server computing was built around an on-premise model in which individual systems tended to be walled off from one another, with few integration points (if any). Application programming interfaces (APIs), likewise, assumed that the transfer of information between applications and systems was happening almost exclusively inside the corporate firewall.

Today’s world, in contrast, is built around web services APIs and microservices. Business functionality is provided through smaller, more discrete packages of functionality that are designed to be highly interconnected with one another. Integration is far more standardized. It’s faster, easier, cheaper, and more reliable. In fact, in many cloud-based scenarios it isn’t even apparent that a user is working with more than one application. “Seamless” integration has become a reality.

Cloud innovation goes far beyond better integration, though. Cloud services are making it possible for small and mid-sized businesses to access an entire new world of functionality that was previously unavailable to them. Artificial intelligence and machine learning have come of age, creating opportunities to work better, smarter, and faster. Cloud-based analytics have evolved rapidly, offering new opportunities to draw insights from unstructured data such as consumer reviews, social media posts, and more.

Many of these functions require intensive processing capabilities; but they don’t necessarily justify investment in dedicated in-house infrastructure. The cloud offers an ideal solution, with its ability to temporarily allocate resources to such tasks as needed. Cloud storage, likewise, can be scaled up quickly and easily, at very low cost.

• Cloud Technology Trend 3: Offloading Complexity: Platform as a Service (PaaS)

Smart business leaders choose to focus intensively on their organization’s key strengths. Everything else gets outsourced. There’s a good reason why most companies don’t handle payroll exclusively in-house, – it’s not their core competency. There’s a lot of detail to keep up with. The legal and tax requirements are constantly changing, and the cost of getting it wrong can be enormous.

So it is with IT. A single security breach can result in severe reputational damage, financial penalties, and legal action. Ransomware has become an increasingly frequent problem. Keeping up with patches and security bulletins, monitoring network traffic, and guarding against attacks can be a full-time job.

Security is not the only concern, though. Disaster recovery and failover capabilities are standard offerings among cloud platform providers. A single natural disaster can wreak havoc on a company’s ability to maintain operations. Even a localized emergency, such as a building fire or a broken water main, can quickly turn into a major problem. Cloud computing does away with all that; your system remains available, no matter where you are, and no matter what is happening on the ground.

As the world of information technology continues to evolve, complexity grows. Threats have become more common. The frequency and volume of updates and patches increases; for operating systems, databases and other platform components, and applications. Managing all of that is burdensome.

Cloud computing shifts a significant body of responsibilities away from management, and puts it in the hands of experts whose business and reputation rests on their ability to execute IT functions thoroughly and efficiently. That, in turn, allows management to focus on core functions and frees up internal resources for innovation.

• Cloud Technology Trend 4: Lower TCO

IT costs can be hard to predict, – especially given the complexities of licensing and pricing for many products. Keeping track of upgrade cycles and managing compatibility of various system components can be challenging to begin with; but when cost complexity is added to the equation, planning and budgeting for IT spend can become a challenge.

Cloud computing is sold on a subscription basis. That provides greater transparency to overall costs, making it significantly easier to plan IT spending. When the cost of hiring, training, and managing IT staff is factored in to the equation, cloud computing can significantly reduce the total cost of ownership.

• Cloud Technology Trend 5: Last Upgrade Ever

Finally, cloud computing offers companies an opportunity to escape the regular cycle of major upgrade projects, which can be disruptive to an entire organization. Cloud-based applications naturally lend themselves to an evolutionary approach, in which incremental changes are applied to the system over time. That means a lot less time spent waiting for that important new feature, and no need to allocate valuable staff time to large-scale upgrade projects.

It wasn’t long ago that most companies viewed cloud-based ERP as a new (and higher risk) alternative to the standard on-premise model. Security concerns and apprehensions about potential disruptions in connectivity led many businesses to adopt a “wait and see” approach. Today, the scales have tipped in favor of cloud computing, as SaaS has become less expensive, more flexible, and far more secure model for enterprise computing, providing a platform for innovation in the coming years.

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