If we exclude the possible cost benefits that a digital business derives from being located in ‘the cloud’, what are the other reasons to work in that way - even if the costs might actually be higher?

You can do a quick search for ‘business benefits of the cloud’ and find a raft of different cloud vendors proposing their view of nonfinancial advantages of a cloud platform.

Different businesses might have different reasons, but one of the most commonly cited is the ability to start up and test a business idea quickly without having to invest heavily (and physically) in the technological infrastructure and architecture associated with it -

whether small or large.

Additionally, many proponents of ‘the cloud’ talk about the ability to focus on the idea of the business rather than on the technology.

Arguably this makes for a better use of human resources, and there could be significantly more expertise available globally to support cloud-based technology than might be available locally for a bespoke technology.

It’s important for each digital business to look beyond the simple ‘Is it cheaper?’ question when looking at how to run the digital business.

Though not without certain risks, cloud-based businesses are clearly here to stay.

Netflix is a well-known global video-streaming business that at the time of writing runs its operation on Amazon Web Services (AWS)

(Izrailevsky, 2016). Historically, Netflix had relied on private data centres to manage its operation. While this might have worked well had it stayed based in a single country, this would prove to be far less manageable as a global offering. It took a long time for Netflix to move away from its traditional data centre model, but a growing market outside the US with millions of users in hundreds of countries meant that this was a transformation that had to be dealt with carefully. The reason to do this would be to allow a consistent service offering wherever customers are, not simply because it would be cheaper.