Learn the Difference Between Traditional Outsourcing vs. Cloud Computing

Angelika Tirona April 19, 2021

Cloud computing is the new outsourcing, as many industry leaders would say. The emergence of cloud and its applications across different organizational functions easily paved the way for better contracting options. 

Both cloud computing and traditional outsourcing deal with storing data remotely, allowing for easy access, transfer, and processing. 

Traditional Outsourcing 

In traditional outsourcing, businesses partner with a third-party company who will be in charge of monitoring and handling data – making them an extension of the business. The professionals maintaining the storage aren’t directly hired by the business, saving them resources on training and salaries. 

Outsourcing isn’t limited to IT capabilities. Some companies offer professional services in marketing, accounting, and e-commerce functions. It’s a common option for businesses who need seasonal or project-based experts to do their work. A good market for traditional outsourcing is small to medium enterprises who don’t have room for big expenses on labor and equipment. 

Cloud Computing 

Cloud computing is a means of uploading data into the internet for easy access and to improve software performance. Companies can save their information without the need for a physical infrastructure, which means they don’t need to worry about system upgrades, installations, and server rooms.  

In a nutshell, the cloud is essentially a virtualized data center which allows business to be more flexible because of how easy it is to grab and store information. Many companies were hesitant when the model was first introduced, but now that its cost have went on a downhill trend, it’s become more cost-effective and attractive to entrepreneurs. 

The biggest hurdles for Cloud Computing 

Compared to traditional outsourcing, cloud computing is a new industry with plenty of room for errors and growth.  

Customer loyalty also isn’t a prerequisite. Users can easily jump from one provider to another if they aren’t satisfied with the services, which are typically influenced by poor customer service and unmet SLAs. While traditional outsourcing tends to be in a locked contract for a long period of time, cloud services are offered on a monthly basis.  

For this reason, cloud providers are placed under extreme pressure to offer impeccable service. Structuring and maintaining efficient systems while addressing customer concerns is a task many find difficulty with, and unfortunately, a task many providers fail at as well.  

Looking ahead 

With the increasing popularity of the cloud, it’s likely that it will cover many other business processes in the future – strengthening its unique “grow or shrink as required” model. SMEs benefit the most from these services, who are free to avail of cloud services only as much as their business grows.  

Many argue that cloud computing won’t sustain its popularity and efficiency in the long run. However, shorter and more flexible contracts will remain a desired option against long-term agreements. In this case, cloud computing can offer more than traditional computing can for a wider range of businesses. 

Soon enough, the cloud will also stretch to integrate more business tasks and meet the industry’s demands. It may be extremely difficult to jump in complicated processes and information to the virtual space, but the continued demand for accessible data storage may pave the way for bigger cloud services no matter the cost.

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