What is Cloud Analytics and Its Importance?

Suhas Hegde 21 Mar, 2024
8 min read

This article was published as a part of the Data Science Blogathon.


The distribution of computer services through the internet is known as cloud computing. Businesses can adopt the cloud computing paradigm, where they can rent IT equipment and services instead of purchasing and operating their data centers. These services cover everything from basic infrastructures like networking, servers, storage, databases, and software to cutting-edge tools like artificial intelligence (AI) and machine learning systems. As less equipment needs to be rented and maintained, the importance of cloud analytics translates into businesses cutting expenses while boosting productivity. Additionally, it makes it simpler to adjust resource allocation to changing business requirements. Additionally, these services can be accessed from any web-enabled device because they are centrally located remotely.

What is Cloud Analytics

The practice of storing and processing data in the cloud to get useful business insights is known as cloud analytics. The algorithms are used to analyze big data sets like on-premises data analytics to find patterns, forecast outcomes, and provide other data helpful to business decision-makers.

Cloud analytics is applying analytic algorithms to data stored in a private or public cloud and then delivering the desired outcome. Cloud analytics combines scalable cloud computing with robust analytical tools to find patterns in data and derive fresh insights. Corporations are using data analysis to gain a competitive edge, enhance scientific research, and improve people’s lives in various ways.

In a private or public cloud network, data processing and storage processes are moved in a cloud analytics model. Businesses prefer the strategy with varying analytics requirements that cannot afford or do not want to use an on-premises data storage solution. The phrase can describe any cloud-based data analytics or business intelligence service that uses a software-as-a-service delivery paradigm.

Even so, there are numerous methods to use cloud analytics. To cut costs or improve performance, some businesses prefer to use hybrid models, retaining some aspects of operations—like data analysis or storage—on-premises while moving others to the cloud. Finally, because cloud storage is frequently far less expensive than on-premises hardware, cloud analytics is also perfect for businesses looking to increase operations quickly without drastically increasing expenditures.

Types of Cloud Analytics

There are three main types:

  1. Public Cloud: Like a public library, anyone can access the computing power to crunch data. It’s affordable but less secure.
  2. Private Cloud: Imagine a private study room. Only you have access to the computing power, making it very secure but expensive.
  3. Hybrid Cloud: A mix of public and private clouds. You can store sensitive data in the private room and analyze other data in the public library.

Importance of Cloud Analytics

Cloud analytics business intelligence tools provide instant access to real-time data when businesses have quickly changing needs. Decisions can be made more quickly and accurately as a result. Enterprises may scale more easily using cloud-based analytics services since they no longer rely on pricey, inflexible on-premises systems.

The cloud has evolved into a storehouse for various data sources as the Internet of Things produces vast data at steadily rising rates. Enterprises may combine data and better understand the information they hold by using cloud computing data analytics. The individuals that require data have access to it thanks to a cloud-based data warehouse. Consolidation aids in the development of real-time prediction models using data mining.

Analytics solutions built on the cloud enable businesses only to employ services as required. This facilitates scaling as a business expands. People who require the information can also access it from wherever they are. Increased sharing and real-time cooperation help global businesses foster a culture of data discovery.

A hybrid analytics solution is effective for users who want to use the cloud to test a new analytics project as a POC before investing on-premises.

Cloud analytics has significant advantages over conventional techniques like spreadsheets and other desktops or on-premises solutions. It is an obvious choice due to its benefits.

How Cloud Analytics Works?

Cloud analytics systems must be hosted online, as the name would imply. Cutting-edge data centers typically power them with the processing power and storage capacity required for huge data analysis.

For cloud services, organizations like Google and Amazon have enormous data centers. Microsoft Azure and Amazon Web Services (AWS) are the two most widely used cloud analytics computer systems. Many powerful servers that support cloud-based data analytics tools are housed in the data centers.

Cloud-based analytics software collects data, which is kept and accessible from anywhere. With the development of machine learning algorithms, cloud-based analytics tools will eventually be capable of learning independently. This will enable increased efficiency and make it simpler to forecast future behavior using historical data.

Cloud Analytics Components

A cloud analytics example, according to Gartner, includes any cloud implementation of the following six components:

1. Data Sources:

These are the numerous places your company’s data comes from. Data from CRM and ERP systems are also frequent examples, as are online usage and social media statistics.

2. Data Models:

A data model structure pulls data and uniformizes the relationships between data points for analysis. Models can be straightforward—using, for instance, data from a single column of a spreadsheet—or complex—involving numerous triggers and parameters in numerous dimensions.

3. Processing Applications:

Cloud analytics uses specialized applications to process massive amounts of data in a data warehouse and speed up the time to insight.

4. Computing Power:

Cloud analytics requires adequate computing power to receive, clean, organize, and analyze massive amounts of data.

5. Analytics Models:

These are mathematical frameworks for the analysis and forecasting of large-scale data sets.

6. Data Sharing and Storage:

Cloud analytics solutions provide data warehousing as a service to enable quick and simple corporate expansion.

Types of Cloud Analytics

Although we often think of the cloud as a non-physical entity, the word refers to vast computer networks hosted in one or more data centers. One of the cloud models listed below may be appropriate for your analytics platform, depending on your objectives and goals regarding security, performance, and access, among other factors.

1. Public Cloud:

A public cloud is cloud computing in which services, such as virtual machines, storage capacity, apps, and more, are made accessible to the general public through a third party. Although users occasionally have to pay for usage or consumption, they are frequently provided for free. Because IT systems are shared, and data is kept private on this public cloud, an enterprise can cut expenditures and maintenance requirements.

2. Private Cloud:

A private cloud is only accessible by a small number of users within a single business instead of being made available to the entire public. It has the same scalability and accessibility benefits as a public cloud but is housed in a data center that is only owned by that one company or a hosting provider. Although this offers greater data protection and privacy, it is frequently far more expensive.

3. Hybrid Cloud:

This third choice combines the first two. Companies that choose a hybrid cloud architecture use the public cloud for less-sensitive data while maintaining a smaller private cloud for information that should only be seen by that organization.

Cloud Analytics Tools

There are a lot of tools for cloud analytics. A lot of these are simple to access using your web browser. Here are a few popular types of  tools and some samples of each:

· Website analytics:

Website traffic analytics is one of the most popular categories of cloud analytics. With the use of these  tools, you may better analyze a website’s traffic, conversion rate, bounce rate, and other statistics to make changes that will enhance the user experience while also increasing income and profitability.

· Financial Analytics:

Without a big staff of financial analysts, it would be hard to uncover trends in revenue and expense as well as other information in your financial results using financial analytics alone.

· Performance Analytics:

Analytics of performance look at sales, manufacturing, or other data to identify bottlenecks, expense sources, and improvement possibilities.

· Sales Analytics:

You may manage customers, and prospects, assess sales across geographies, and keep tabs on your sales team’s performance with the aid of sales analytics software. Important trends or signals can be revealed by this data, which can aid in the development of more successful sales tactics by leaders.

· Power BI:

Software as a Service
(SaaS) model is a popular way cloud analytics providers deliver business intelligence, often known as cloud BI. In this context, the tools and technologies used to gather and parse business data are referred to as business intelligence (BI). Online analytical reporting (OLAP), data and text mining, predictive and descriptive analytics, and performance benchmarking are just a few of the operations covered by BI. Easy-to-understand reports and data visualizations are produced by BI software after it collects and examines pertinent data from a data warehouse. BI and data analytics work together to improve performance and aid in business decision-making.

Benefits of Cloud Analytics

Benefits of Cloud Analytics

When selecting an analytics solution, business owners and managers should take into account below benefits of cloud analytics:

1. Scalability:

When workloads and data volumes increase quickly, administrators using on-premises platforms must buy and install more hardware to meet the demand increase. This service model frequently results in over-provisioning and costs that may appear needless if demand declines in the future. Organizations can scale up with cloud analytics services to handle demand surges by bringing more instances online (or reducing them when demand lowers) and only paying for what they use.

2. Security:

The adoption of strong encryption by cloud data analytics providers helps protect data while it is transported over networks. When comprehending a company’s data, cloud analytics offers more granular control over data access, improved auditing capabilities, and a single source of truth. Analytics cloud storage may also help secure data during calamities and natural disasters.

3. Cost:

On-premises solutions need periodic upgrades and migrations in addition to the price of the numerous hardware needs, which invariably results in system downtime that affects business continuity. Additionally, on-premise analytics call for particular skill sets that some businesses lack or cannot afford to hire. With cloud analytics, businesses can access service providers’ in-house knowledge without buying and maintaining additional infrastructure.

4. Collaboration:

Data from many sources can be combined with cloud data analytics, and models can be instantly updated. Workflows based on the cloud and file-sharing tools enable collaboration across several teams, which is ideal for multinational corporations. Employees may share files and interact in real-time thanks to improved access and unified data.

5. Consolidation:

Obtaining a unified perspective of big data is incredibly difficult since it comes from many different, independent sources across the enterprise. A company’s data sources are combined through cloud analytics to create a more comprehensive picture. All stakeholders may readily access this data in one location, regardless of their physical location (or the location of the data), to acquire more precise insights and make better business decisions in real time.

Challenges in using Cloud Analytics

Businesses are increasingly deciding that more is better in the cloud. Businesses choose hybrid cloud as a way to balance workloads, for instance, by using the public cloud for peak processing or storage needs. When several providers can suit various company demands, they decide to use multiple clouds. However, each trend has its own unique set of difficulties. Security is one of the biggest obstacles in both contexts. When all or part of the organization’s data is moved to a public cloud, the organization’s data security is no longer consolidated within the private cloud and must now manage two security platforms. In a multi-cloud context, security challenges are more obvious because the business must manage various security platforms without controlling its security processes or policies.

In these cloud systems, data governance and compliance also become increasingly difficult. Particularly in a multi-cloud environment, it becomes more challenging to understand where data is located. This makes regulatory compliance infractions more likely, which puts your company in danger. It is crucial that IT has the right tools available to monitor these environments and adhere to the unique regulatory needs of the firm.


Every day, your company produces a staggering amount of data. Consolidating that data and transforming it into useful insight while simultaneously lowering acquisition and maintenance costs is made possible by cloud analytics. The secret is to foresee your company’s requirements so you can make the most of your preferred platform. The information you require to give your firm a competitive edge is in front of you. You may put them at your fingers, harnessing the importance of cloud analytics.

Key points to take away are:

  • Analyze data on the cloud instead of the local system
  • Provides your large data sets on a cloud for the same
  • Different features of cloud type and any type can be picked based on our requirements
  • Cheaper as compared to local analytics tools.

It makes sense that more businesses will adopt cloud data analytics because it is less expensive than on-premise analytics systems. It can fundamentally alter the way businesses operate.

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Suhas Hegde 21 Mar, 2024

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