Netflix has been called the world’s largest cloud-based commercial operation. Netflix launched in 1998, selling and renting DVDs by mail, and has streamed content direct to consumers since 2007. Netflix started migrating all its operations to the cloud in 2008, after a database corruption issue created a three-day delay in shipping DVDs to members.

In 2016 Netflix reported that the company had completed its seven-year migration to a fully cloud-based service. Yury Izrailevsky, Vice President of Cloud and Platform Engineering at Netflix, used the company’s media center site to explain the rationale for the migration. “We realized we had to move away from vertically scaled single points of failure, towards highly reliable, horizontally scalable, distributed systems in the cloud,” Izrailevsky wrote. “Moving to the cloud has brought Netflix a number of benefits. We have eight times as many streaming members than we did in 2008, and they are much more engaged, with overall viewing growing by three orders of magnitude in eight years.”

While Netflix may be among the largest companies migrating to cloud-computing, the benefits cited by Mr. Izrailevsky are available broadly to enterprises of any size. Small and midsize businesses (SMBs) are adopting cloud-based computing to obtain the advantages of reliability, scale, security, rapid deployment and lower costs. As the cloud phenomenon continues to exert its influence with businesses and consumers, it is useful to review the basics of cloud computing and its potential impact on self-storage.

Cloud computing is defined by the ways information is stored, managed, processed and accessed. With cloud computing these functions are located remotely and accessed by the internet, instead of being housed on a local server or personal computer. Providers require users to sign a service level agreement (SLA) that defines the services customers receive.

The National Institute of Standards and Technology (NIST), operated by the U.S. Department of Commerce, is a reliable resource for defining the terms used with cloud computing. A 3-page paper on the NIST website defines the attributes, service models and deployment models of cloud computing.

Attributes of cloud computing:

  • On-demand self-service: Customers can establish new users and new services without involving the service provider.
  • Broad network access: Services are available over the internet.
  • Pooled resources: Customers share resources that are accessed as needed.
  • Rapid elasticity: Services can expand or contract quickly and as needed.
  • Measured service: Customers pay only for what they use.

Service models of cloud computing:

  • Software as a service (SaaS): Examples include email, customer relationship management (CRM) and cloud storage.
  • Platform as a service (PaaS): Examples include websites and web applications.
  • Infrastructure as a service (IaaS): Examples storage discs, servers and network equipment.

Deployment models of cloud computing:

  • Private cloud: Service for one user
  • Community cloud: Service accessed by a group of people
  • Public cloud: Service used by the general public
  • Hybrid cloud: Private, community or public clouds used in combination

Worldwide growth is one of the primary characteristics of cloud computing. The Gartner research firm reports that revenues for software as a service exceeded projections for 2016, and SaaS has grown faster than expected for 2017. Worldwide SaaS revenue for 2017 is expected to increase by 21 percent to reach $58.6 billion.

According to Garner, “The acceleration in SaaS adoption can be explained by providers delivering nearly all application functional extensions and add-ons as a service.” In other words, SaaS applications can be maintained and updated by the provider, which greatly reduces the cost and bother of day to day oversight. As consumers we are already familiar with SaaS applications that deliver high levels of functionality with low levels of oversight. Cloud-based applications such as PayPal, Pandora, Google Maps, Lyft and Airbnb are available on a pay-as-you-go basis with automatic updates delivered by providers. Even the familiar software tools of Microsoft Office—PowerPoint, Word and Excel—are now available by cloud subscription through Office 365.

A Time article from 2015 validated the idea that consumer adoption of cloud applications has fostered more adoption of cloud-based applications by businesses. As an example, CEOs and CIOs are using LinkedIn, Salesforce and Dropbox every day, so it is becoming easier for them to trust the ease and reliability of cloud-based applications for their businesses. The Time article quoted a Cisco prediction that 75% of workflows handled by corporate computers will be processed by cloud data centers by 2018.

Because cloud solutions are scalable, accessible, reliable and cost-effective, businesses will continue to adopt cloud-based computing at the accelerated rates cited above. Additionally, as cloud solutions have become more efficient they have also become more secure. Gartner stated in its 2017 report that the security of data in the cloud equals or exceeds the levels most businesses are able to achieve with their on-premise IT operations.

Some computing applications used by self-storage operators will certainly migrate to the cloud in 2018. Franklin Young, CEO at PTI Security Systems, noted that facility operators will benefit from cloud-based security and controller software. “We want to make our software available on the cloud so it is easier to use and more reliable,” Young said. “The cloud is a natural fit for the software our customers use for access control, site security and facility management. If you’re already using apps like Gmail, Spotify, Facebook and PayPal, you’ll find our cloud-based software will be equally intuitive, seamless and simple.”