how cloud enables CIOs to accelerate digital transformation

How Cloud Enables CIOs to Accelerate Digital Transformation

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How Cloud Enables CIOs to
Accelerate Digital Transformation

Author: Robert Middeldorp
Date: April 26, 2022

Why Cloud is not Hosted Compute

Both public cloud and hosted compute services offer the capability of shifting IT resources from physical data centres to third-party service providers to improve flexibility, quickly scale capacity to meet demand, and reduce the burden of managing physical assets from a monetary and operational aspect. While both options allow companies to leverage infrastructure located outside of their physical data centres, there are strong distinctions between both services related to cost, accessibility, security, scalability, and the variety of available service offerings.

What is Hosted Compute?

In general, “hosted services” is a term used to describe IT services that allow your organisation to purchase capacity on physical servers and storage devices located at the service providers data centre facilities or in their hosted cloud. In a traditional hosted compute set up a dedicated server or group of servers is accessed by your IT department through a direct network connection over the internet or using a private network (VPN).

A cheaper hosted service option is a virtual server which is partitioned from a physical server to give your company access to a portion the device’s processing power, RAM, and hard drive capacity. Your company has complete control of the partitioned capacity but not the actual physical server. As a result, you will not be able to control the amount of server capacity used by other entities being hosted on the same server. This lack of control over resources and privacy can make your data less secure when compared to a dedicated server.

Some of the most common hosted services include:

  • Email Servers
  • SaaS (Software as a Service)
  • Disaster Recovery
  • Data Warehouse
  • Website hosting
  • Virtual Servers

What are Cloud Services?

Cloud services are “hosted services” exclusively hosted in the cloud that are more focused around on-demand service offerings than renting “space” on the providers physical infrastructure. Cloud services are primarily accessed via the internet but also include the option to connect directly to the cloud through a private network. A primary feature of cloud services is the pay-as-you-go model which allows more flexibility than “hosted services” that require you to purchase capacity up front.

Cloud services allow companies to access shared IT resources spread across the globe from any location through the internet. Access to virtually unlimited computing power and storage space enable organizations to quickly scale capacity to meet increasing demand while paying only for what they use.  In most cases, purchasing capacity from cloud vendors is significantly cheaper than the upfront cost of procuring physical devices to meet demand due to economies of scale and eliminating the need to maintain data centre infrastructure.

There is a vast array of cloud services offered by cloud vendors which include applications, operating systems, computing, storage, networking, and machine learning to name a few. Cloud services are categorized into the following categories:

SaaS (Software as a Service)

SaaS provides the benefits of a typical application without the need to maintain the software on your physical servers. Applications are accessed via internet browser and secured, maintained, and updated by the vendor. SaaS is the most popular cloud service due to the huge variety of solutions available that can meet the requirements of almost any use case.

PaaS (Platform as a Service)

PaaS exists in between SaaS and IaaS in the technology stack. This category includes the software and development tools that developers use to build applications.  PaaS also consists of operating systems, database tools, middleware, and virtual servers used to run existing applications on cloud infrastructure.

IaaS (Infrastructure as a Service)

IaaS sits at the bottom of the technology stack and includes physical/virtual servers, storage, and networking capacity designed to replace a traditional data centre. On-demand access to these resources allow organizations to quickly deploy new applications built to their desired specifications.

The Difference Between Cloud and Hosted Services


Cloud Services are typically less expensive than hosted compute due the different billing models used to charge customers. Renting a dedicated server will most likely require companies to pay a flat fee regardless of actual usage. Cloud services are charged based on real time usage and the expense of maintaining cloud infrastructure is spread across hundreds to thousands of clients allowing cloud vendors to price services competitively.


Increasing capacity for hosted services would most likely require additional servers to be configured, deployed, and potentially procured by the vendor. In comparison, cloud services can be set up to automatically scale based on real time usage without the need for additional implementation or configuration. This mitigates the risk of degraded performance or downtime since additional resources can automatically be added within minutes.


If you require a higher level of accessibility, then cloud computing is the better option since it allows your organization to access data and resources from any location via web browser. Hosted services only provide limited access to resources due to the restricted methods your organization can use to connect.


For companies that need to maintain sensitive data, leveraging a hosted service with a dedicated server will provide a higher level of security than public cloud since access is highly limited. Cloud solutions give companies a lower level of control over where their data resides alongside data from other companies. On the other hand, cloud services are most likely to have up-to-date security measures and performance since there is ongoing pressure to ensure the safety client information.

How Cloud Enables Digital Transformation

Cloud services offer a superior number of options to help enable your digital transformation efforts. You can deploy additional IT resources with minutes instead of months by leveraging cloud services and allowing cloud vendors to take on the burden of maintaining the physical technology infrastructure. More importantly, your organisation will have a higher level of control over supply and demand for technology resources in addition to potential cost savings.

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