With AI changing our world, it’s easy to overlook another technology that’s also been transformative: the cloud. Thanks to the complex server network that stores, manages, and processes data, we can use all kinds of technologies and services from our phones and laptops—including AI.
Anyone using ChatGPT for searches, Apple Maps for navigating city streets, or Amazon or Walmart for online shopping is relying on cloud technology. Indeed, it’s nearly impossible to avoid using it. Even if you’re zoning out with rom-coms on Netflix or cat videos on YouTube, you’re still using the cloud.
While it was not the case 25 years ago, today it’s essential for nearly any company to understand the cloud. With that in mind, we list below four essential truths about using the technology.
Cloud security is a ‘huge investment’
Unfortunately, the first thing to know is that data breaches do happen in the cloud, especially when best practices are ignored. Companies and individuals can run into trouble, for example, if they don’t use multi-factor authentication, thereby allowing hackers to more easily access sensitive information.
For companies, fending off unauthorized access is no trivial task. Greenhouse, which sells employee-recruiting software to HR professionals, relies on the cloud but takes security very seriously.
“We have a huge security infrastructure, as you can imagine, because we’re under constant attacks 24/7,” cofounder and CEO Daniel Chait told Fortune. Since Greenhouse is often listed on a client’s website, hackers “have started targeting us more often,” he added. “We’ve done a good job of keeping the bad guys out, but it’s a huge, huge investment.”
Greenhouse’s security playbook includes encrypting all passwords, purging job-candidate records after 30 days, and requiring third-party services to undergo annual security reviews and sign legally binding contracts on how personal data can be handled.
Any company operating in the cloud will need to develop its own security practices, as well.
The cloud transforms shopping
Companies are also leveraging the cloud to provide new ways for shoppers to find what they need. Walmart, for instance, offers a search tool powered by gen AI that helps customers discover relevant products more easily. The cloud-based tool will suggest items ranging from food to decor, for instance, to a shopper planning a family gathering.
“Customers aren’t just finding products, they’re being understood,” Ja-Naé Duane, an academic director at Brown University’s School of Engineering, told Fortune. “Whether it’s voice orders or gen AI search, AI is quietly turning shopping into a more intelligent, more seamless experience.”
And if companies like Mastercard have their way, the days of customers manually typing in credit card numbers to buy something online will soon come to an end. Indeed, Mastercard says its cloud technology could make plastic cards obsolete in as little as five years, assuming consumer habits can be overcome.
To get there, Mastercard is using tokenization, whereby a “stand-in” number saved on your phone, laptop, or other devices—rather than a credit card number or other sensitive information—is used by merchants and card issuers.
“We’re eliminating manual card entry by applying payment passkeys using the secure biometrics on the devices we already use, like mobile phones, to seamlessly authenticate a purchase,” Jennifer Marriner, executive vice president of acceptance solutions at Mastercard, told Fortune. “This authentication, paired with tokenization—which secures billions of transactions annually—makes seamless one-click checkout possible.”
The cloud’s impact is deeper than AI
With AI dominating the headlines, it’s easy to overlook other ways in which the cloud has transformed doing business. Consider the manner in which companies deliver TV shows and movies to viewers. Streaming platforms like Netlix, Hulu, and Amazon Prime Video offer massive libraries that can be tapped on-demand and buffer-free by anyone with a solid internet connection.
The shift from linear TV to streaming has been enabled by cloud technology, Shaown Nandi, director of technology at Amazon Web Services, told Fortune.
“They were new consumption patterns, and we had a lot of pressure,” he said. “We created a product called Local Zones, and we have CloudFront, which is our content distribution product, and these are all pieces of computed edge locations, so that we could help streaming providers get their content to their customers quicker and easier.”
Similarly in banking and financial services, customers no longer need to visit local branches or wait for the mail to access their financial information. And if they want to invest in a company or buy cryptocurrency, they can do so in minutes from a smartphone app.
The cloud changes different industries at different speeds
Some industries embraced the cloud rapidly. In e-commerce it quickly became a necessity, which helps explain why Amazon was a pioneer in offering cloud computing—once it figured out how to use the technology for itself, it realized other companies would need something similar, leading it to launch Amazon Web Services in 2006.
Other sectors, especially heavily regulated ones, have been slower to adopt the cloud, among them finance, pharmaceuticals, and health care.
But as the health-care industry’s cloud adoption demonstrates, the technology tends to get accepted sooner or later.
“In the past, we had to rely on some very basic tools,” Dr. Patrick McGill, a family physician and the executive vice president and chief transformation officer at Community Health Network in Indianapolis, told Fortune. Quickly analyzing patient needs was a challenge, he said, with the bulk of health-care data existing in unstructured notes. But today, “you can now look at the entire chart, all the notes and everything else, with the cloud technologies.”
Thanks to the cloud it’s also become far easier for different health-care facilities to exchange information about a patient. From the perspective of patients, meanwhile, it might not be obvious how the cloud has changed the game. But “what they would see is that they had a more frictionless experience of getting their lab results from another system, or maybe getting their prescription authorized, or prior authorization,” McGill added. “Whereas in the past, it relied heavily on fax machines and things like that.”