Industry 4.0 • October 19, 2018

What Value Does Cloud Bring to Manufacturing?

For many businesses, the initial rush to the cloud was mostly about saving money and keeping up with the competition. Companies were thrilled to avoid major capital expenses for new hardware and software by changing over to monthly subscription charges for cloud services. Not surprisingly, that wasn’t a good enough reason for most manufacturers to make the leap to the cloud. After all, manufacturers are used to spending big chunks of capital on equipment. To stay competitive, they have to invest heavily in expanding facilities, modernizing operations and automating processes. Cloud services may have initially seemed too lightweight or impermanent for a sector focused on tangible assets.

We’ve seen this perception shift over time as cloud technology proved its mettle and might. In the 2017 State of Manufacturing Technology report, 90 percent of manufacturers surveyed were using cloud-based productivity applications. As they gain confidence in their use, they are adopting cloud applications in greater volume. In fact, some manufacturing firms have initiated a cloud-first strategy, looking to the cloud as the first option for any new application and requiring justifications for any new projects that favor on-premise hardware or software.

The cloud offers a wealth of benefits that become more readily apparent with each passing day, including: ease of use, security, flexibility, cost, smoother upgrades, on-demand service, scalability, pooled resources, integration, portability (to devices such as smartphones and tablets), operational efficiency, data storage, decision-making support, productivity and collaboration.

Let’s explore a few of these benefits in more detail:

Ease of Use

Manufacturers are accustomed to waiting for new computing systems and applications to be ready. The traditional model was to figure out what you wanted and either develop the system or purchase it. Either way, months would go by in design and development, or evaluation and procurement. Testing would add more time and implementation could take many months — even years in the case of large-scale projects. At the end of that runway, the results might not fulfill initial hopes, or business objectives might have shifted away from the planned capabilities.

With the cloud, companies have the chance to add software and systems rapidly. In some cases, it can be done in a few hours. If a major migration of data is required, it no longer requires weeks of clogging up the network with information transfer. Instead, cloud providers have the ability to bring a small data transfer box into your business. You upload the data, ship the unit to the cloud provider, and they load it onto their systems.

Flexibility and Cost

When it comes to hardware, organizations are used to overbuying. They know that if they run out of capacity or compute power, it can take them some time to gain purchase approval for new equipment, order it, install it and integrate it into the infrastructure. The time-honored solution has been to forecast how much you might possibly need over the next couple of years and purchase accordingly.

The cloud, on the other hand, is all about only paying for what you use. Providers can ramp services and capacity up or down rapidly to suit organizational demand. If the Christmas period or the quarter end brings a massive upsurge in traffic or usage, the cloud vendor provisions more resources for that period. When the rush is over, service levels fall back to normal. As a result, manufacturers gain access to the resources they need without having to pay a premium for internal data center infrastructure that may be underutilized for most of the year. This flexibility is one of the primary benefits of moving to the cloud.


Data storage is another problem that the cloud eliminates. Manufacturers are accumulating mountains of Big Data due to the rise of the Internet of Things and digital transformation. This creates new challenges around data storage and management. Internal storage is expensive – particularly in the capacities required by smart factories.

The cloud offers access to abundant and cheap storage. Some providers even offer tiered services. You can buy slightly higher priced plans for top tier data to which you need the fastest possible access. But the bulk of data can be relegated to lower-cost cloud tiers or even sent to a cloud archive at the cheapest rates. This leaves information available without burdening IT with the challenges of storing, monitoring, securing, and managing data internally.

Perhaps the biggest benefit cloud services provide is to lighten the decision-making burden for already strapped IT departments. It isn’t easy to set up an internal infrastructure to host all organizational information, purchase enough compute power to address big data, and develop the applications that can glean real insight from that data. In fact, such undertakings are very expensive and many manufacturing IT teams lack the necessary expertise and experience. Data scientists, big data analysts, and information security specialists are in short supply. The cloud bypasses most of these problems by offering access to top-of-the-line analytics applications that can crunch through organizational information to isolate evolving trends. Cloud providers are staffed with experts and have implemented similar infrastructure and services many times over. Offloading this burden opens the door to higher profitability, increased efficiency and competitive advantage, while also removing risk and allowing internal IT to stay focused on priority projects.

As manufacturers move through the thrilling and vexing experiences of digital transformation, adopting cloud services when they are good fit can help leaders and IT teams stay focused on innovation, customer needs, and building towards future opportunities.

Whitepaper: Digital Manufacturing