Cloud Computing in Manufacturing: The Ultimate Guide

IoT Industry 4.0 Machine Manufacturing Software
September 15, 2024 LUC ATANGANA

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When I got my first cell phone that could take pictures, I remember how excited I was to capture moments everywhere I went.

However, I lost that phone—and with it, I lost all the pictures I had taken. When I got my second phone, my first thought was, “What if I lose this one too? Will all the pictures disappear again?” I didn’t want to go through the experience of losing precious memories a second time.

Picture of an old cellphone. To illustrate a time before cloud computing.

Back then, the only option I had was to manually transfer my pictures to my laptop. I felt more secure doing this because, in my mind, a laptop was less likely to be lost than a phone.

But then I realized something else: laptops can crash, get stolen, or fail. Even after moving my photos to my laptop, I wasn’t 100% safe. I could still lose everything if something went wrong with the laptop.

Another issue I faced was that my photos were trapped on my laptop. If I wanted to access those pictures, I had to have the laptop with me. If I wasn’t at home or didn’t have the laptop, I couldn’t see or share any of my photos.

I wasn’t alone in facing this problem. Anyone storing their data on local devices—whether it was a phone, a laptop, or a desktop—faced these same risks.

Losing a device or a hardware failure could mean losing everything. And the inconvenience of needing to carry specific devices just to access files or photos added to the frustration.

Solving this problem, and others like it, has played a major role in the rapid rise of cloud computing. In this article, I’ll explore the basics of cloud computing—how it works, its evolution, and its impact on everyday life. I’ll also dive into cloud computing in manufacturing, with a focus on how it has democratized access to advanced technologies.

Once only available to large corporations, these tools are now within reach of manufacturers of all sizes, leveling the playing field and enabling innovation across the board.

Introducing Cloud Computing: A Better Solution

Now, think of a better solution—something that can make all of this easier. Enter cloud computing.

With cloud computing, instead of storing your pictures (or any other data) directly on your phone or laptop, you upload them to the cloud. But what exactly is “the cloud”? The cloud is a network of powerful computers (called servers) that store your data in remote locations.

These servers are managed by large companies like Google, Amazon, or Microsoft, and they are designed to keep your data safe, accessible, and backed up.

When you upload your photos or documents to a cloud service (like Google Drive or iCloud), they’re no longer tied to a specific device. Even if you lose your phone, or your laptop crashes, your data is safe because it’s stored on the cloud’s servers. You can access your files anytime, anywhere, from any device with an internet connection.

Cloud Computing vs. Traditional Computing

In short, traditional computing, means storing your data on local devices like your phone, laptop, or desktop computer. This means:

  • If the device is lost, damaged, or crashes, you might lose your data forever.
  • Your data is only accessible from that specific device, so if you’re not carrying it with you, you can’t access your files.

In cloud computing, you store your data on remote servers, which offers several advantages:

  • Safety and Redundancy: The cloud keeps multiple copies of your data across different locations (called redundancy). So even if one server crashes, your data is still available from another.
  • Accessibility: You can access your data from any device—phone, tablet, laptop, or desktop—as long as you have an internet connection. This gives you the freedom to access your files wherever you are.
  • Automatic Backups: Cloud services often automatically back up your data in real-time, so you don’t have to worry about manually saving or transferring your files.
  • Scalability: If you need more storage space, you don’t have to buy new hardware (like a bigger hard drive); instead, you can easily upgrade your cloud storage plan.
  • Cost-Efficiency: With cloud computing, you don’t have to spend money maintaining expensive servers, buying backup devices, or worrying about hardware upgrades. You pay for the cloud service, and the provider takes care of the infrastructure.

Cloud computing is a huge step forward from the days when you had to manually back up your data on local devices, always worrying about losing everything if your device was stolen or crashed.

Now, with cloud computing, your data is safer, more accessible, and easier to manage, giving you peace of mind and the convenience of accessing your files from anywhere.

Of course this short story illustrates some of the benefits of cloud computing with a real life scenario. But how did cloud computing come about? This next section tries to briefly explain. If you already know the history of cloud computing, feel free to skip to the next section.

A Brief History of Cloud Computing: How We Got Here

In the next sections, I’ll be discussing the ‘early days of the internet’—a time when the digital world was far from what it is today. To help you better understand how cloud computing fits into that context, let’s take a quick look at the history of the internet and the evolution of cloud computing.

1960s: The Birth of the Concept

The concept of cloud computing can be traced back to the 1960s, when computer scientist John McCarthy suggested that computing could be delivered as a utility, just like electricity or water. The idea was ahead of its time, but it planted the seeds for what would eventually become cloud computing.

Meanwhile, the foundations of the internet were being laid. In 1969, the Advanced Research Projects Agency Network (ARPANET), funded by the U.S. Department of Defense, was created. ARPANET was the first network to use packet switching, a technology that would later evolve into the internet as we know it.

1970s–1980s: Early Networking and Virtual Machines

In the 1970s, the development of networking technologies allowed computers to communicate with each other, and companies began building data centers to manage large-scale computing tasks.

In the 1980s, virtualization technology began to take shape. Virtualization is the idea of creating a virtual version of something, like a server or storage device, which would eventually become a key component of cloud computing. IBM introduced VM (Virtual Machine) technology, allowing one computer to run multiple operating systems at once. This paved the way for future cloud-based services.

The internet continued to grow during this period, but it was still mostly confined to research institutions and governments.

1990s: The Commercial Internet and Early Hosting Services

The 1990s saw the rise of the commercial internet, bringing the world wide web to businesses and homes. Companies began building their own servers to host websites, store data, and process transactions.

  • 1991: The internet was opened to the public, and websites like Amazon and eBay emerged, requiring companies to maintain their own physical servers to handle traffic and data.
  • 1999: Salesforce, a customer relationship management (CRM) company, became one of the first businesses to offer services over the internet. They delivered their product through a model called Software as a Service (SaaS), which is a precursor to modern cloud computing. Instead of installing software on individual computers, users could access it online through a browser. This idea of accessing software remotely over the internet would become a core part of cloud computing.

Early 2000s: The Rise of the Cloud

The early 2000s saw the birth of modern cloud computing as we know it today.

  • 2002: Amazon launched Amazon Web Services (AWS), offering storage, computing power, and databases as a service. AWS started small but quickly evolved, becoming a dominant player in cloud computing.
  • 2006: Amazon expanded its cloud offerings with Elastic Compute Cloud (EC2), allowing businesses to rent virtual servers to run applications. This eliminated the need for companies to buy and maintain their own physical servers, marking a significant shift from traditional computing.

The internet was also booming during this time, with widespread broadband access enabling people to stream videos, use online applications, and engage with social media. Companies began to realize the benefits of moving their operations online, and cloud computing provided the perfect infrastructure to support this growth.

2010s: Cloud Becomes Mainstream

The 2010s marked the mainstream adoption of cloud computing. Major players like Google, Microsoft, and IBM entered the cloud market, offering their own cloud services to businesses of all sizes.

  • 2010: Microsoft launched Azure, a cloud platform for building, deploying, and managing applications. Google introduced Google Cloud Platform (GCP) around the same time.
  • 2011: Apple iCloud launched, bringing cloud computing to millions of consumers who could now store their photos, documents, and data remotely and access them from any device.

This period also saw the development of Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) models. These offerings gave businesses even more flexibility, allowing them to rent not just storage and servers, but entire development environments and infrastructure.

2020s and Beyond: The Cloud Dominates

Today, cloud computing is an essential part of how the internet operates. From Netflix streaming services to the applications running on your phone, cloud-based systems handle much of the data processing and storage that powers the digital world. Major advancements in areas like artificial intelligence (AI), big data, and machine learning are being driven by cloud computing’s scalable and flexible infrastructure.

Cloud computing continues to evolve, with new innovations such as serverless computing, which allows developers to run code without managing any server infrastructure, and edge computing, which brings computing power closer to where the data is generated (e.g., IoT devices), reducing latency.

Now that you have a brief context on the history of cloud computing, let’s talk about how cloud computing actually works.

How Cloud Computing Works

Most of the internet that you interact with is based on a structure called server-client architecture. This architecture forms the backbone of how the web functions today, enabling everything from browsing social media to shopping online.

In this architecture, there are two main players:

  • The server: A highly specialized computer that stores, processes, and serves data to clients. It’s like the brain of the operation, designed to handle many requests at once and deliver the required information.
  • The client: A computer or device (like your phone or laptop) that makes requests to the server. When you open an app or visit a website, your device acts as a client, asking the server for specific data.

For example, when you open your Instagram app, your phone (the client) sends a request to Instagram’s servers. Essentially, your phone is saying, “Hey Instagram, show me my latest feed.” The server processes the request, runs it through algorithms, and sends back the photos, reels, and stories that make up your feed. This back-and-forth communication happens in the blink of an eye, but it’s based on the same client-server relationship.

The Early Days of the Internet

In the early days of the internet, companies had to build and maintain their own servers to support this client-server model.

Every business that wanted an online presence—whether it was a retail store, a bank, or a tech company—needed its own servers to process customer requests, store data, and handle transactions. This was an expensive, complicated, and time-consuming process.

For example, a large company like Netflix (before moving to the cloud) had to invest in massive physical servers that would store its entire library of movies and TV shows.

Netflix’s servers had to be powerful enough to handle millions of customers streaming content simultaneously. This required not only purchasing and maintaining expensive hardware but also making sure there was enough capacity for growth.

When Netflix’s customer base expanded, they had to keep buying more servers. If they underestimated their needs, users would experience slow streaming or outages during high-traffic periods.

The Shift to Cloud Computing

As companies grew, managing all of their servers in-house became increasingly difficult and costly. That’s where cloud computing changed the game.

Cloud computing is like outsourcing the server part of the equation. Instead of building and maintaining their own servers, companies can now rent server space and computing power from cloud providers like Amazon Web Services (AWS), Microsoft Azure, or Google Cloud.

These cloud providers have massive data centers filled with servers, and companies can use these servers as needed without having to deal with the infrastructure themselves.

In the case of Netflix, the switch to the cloud allowed them to no longer worry about maintaining their own servers. Instead, they started using Amazon Web Services (AWS), which provided a more reliable, scalable, and cost-effective infrastructure.

AWS allowed Netflix to focus on delivering content and improving the user experience while leaving the server maintenance and scaling issues to the cloud provider.

Cloud Computing in Manufacturing Real-World Scenario: The Story of UberMilk

Now that you understand a bit about how cloud computing works, let’s talk about cloud computing in manufacturing. To do this, let’s imagine a ficticious company called UberMilk.

Let’s say UberMilk is a leading global manufacturer in the dairy industry, producing an impressive 5 million liters of milk every month. They operate five large manufacturing plants spread across different continents—one in North America, one in Europe, one in Asia, one in South America, and one in Africa. Each plant operates independently but plays a crucial role in ensuring UberMilk meets global demand for high-quality dairy products.

The Challenge:

As UberMilk grew, they encountered a significant challenge: how to centralize information and streamline operations across all five plants.

Each plant generates massive amounts of data—from production schedules, quality control metrics, equipment performance, inventory levels, to shipping information.

For the business to operate efficiently, the plants need to communicate in real time, share data, and synchronize operations.

But here’s the problem:

  • Each plant stores its data locally, which leads to data silos.
  • Any time one plant needs information from another, they must rely on slow, manual processes like email, phone calls, or local servers.
  • When management tries to make high-level business decisions, it takes time to gather and analyze all the necessary data from these dispersed locations. Sometimes, by the time they have the full picture, it’s already too late to act.

This setup is inefficient, expensive, and prone to delays. In an industry like dairy, where production and distribution must be tightly coordinated due to short shelf life, these inefficiencies are costly.

The Need for a Centralized Solution:

To solve these issues, UberMilk’s leadership realizes they need a centralized system—one that allows all five plants to communicate seamlessly and share data in real time, without having to invest in expensive IT infrastructure at each location. They also need the system to scale as they grow, to handle spikes in demand, and to ensure they can access their data from anywhere, anytime.

This is where cloud computing comes in.

Cloud Computing in Manufacturing

1. Centralization of Information

With cloud computing in manufacturing, UberMilk can store all its data—across all five plants—in one central, cloud-based platform. Instead of each plant having its own isolated servers, the data from every plant is uploaded and stored in the cloud. This means that management, operations, and logistics teams can access real-time data from any plant, anywhere in the world.

For example, the plant in North America can instantly view the inventory levels of the plant in Europe, ensuring they can coordinate production and shipping efficiently. Likewise, corporate headquarters can monitor the overall performance of each plant from a central dashboard.

2. Reliability

The cloud provides high availability. In the past, if one of UberMillk’s plants experienced a server failure, they could lose critical data, causing downtime and delays. With cloud computing, this risk is mitigated. Cloud providers ensure redundancy, meaning the data is always backed up across multiple locations. Even if one server goes down, the data remains safe and accessible.

For UberMilk, this means they no longer have to worry about outages at individual plants disrupting their entire operation.

3. Flexibility

Cloud computing also offers UberMilk the flexibility it needs to adapt to changing demands. For instance, during certain times of the year—such as holidays or special events—the demand for their dairy products might surge. With traditional IT systems, scaling up to handle this extra demand would mean purchasing and setting up more servers at each plant, which is both costly and time-consuming.

With the cloud, UberMilk can scale up or down instantly. If they need more storage, processing power, or bandwidth to handle increased production or data from their plants, they can get it at the click of a button. When demand goes back to normal, they scale back down, paying only for what they use.

4. Cost-Efficiency

UberMilk also stands to save significantly on costs. In the traditional model, they would need to invest heavily in servers, IT staff, and maintenance at each of their five plants. They would need to update hardware regularly and ensure security protocols were always in place.

With cloud computing, UberMilk can outsource these responsibilities to a cloud provider. They don’t have to worry about buying new hardware or maintaining it, and they get access to cutting-edge technology without massive upfront costs. They only pay for what they use, making their IT expenses more predictable and manageable.

5. Security and Compliance

Given the sensitive nature of manufacturing data, especially with food production, security is a top concern for UberMilk. Cloud providers offer robust security features, including encryption, secure access controls, and regular updates to protect against cybersecurity threats. In addition, cloud providers can help ensure compliance with global regulations around data security and privacy, which is especially critical given UberMilk’s international operations.

The Outcome:

By adopting cloud computing, UberMilk can now:

  • Centralize its data and allow seamless communication between all plants.
  • Enjoy reliable access to data even in case of server failures.
  • Scale its operations quickly and efficiently as demand fluctuates.
  • Save on IT costs, only paying for what they need.
  • Ensure data security and compliance across their global operations.

In short, cloud computing has transformed UberMilk’s operations, making them more agile, cost-effective, and better positioned for future growth. With all their plants working together in real time, they can now focus on what they do best: producing high-quality dairy products for their customers around the world.

This is the promise of cloud computing for manufacturers. Reliable, scalable, streamlined, & cost-efficient operations.

Additional Benefits of Cloud Computing in Manufacturing

One of the most incredible benefits of cloud computing in manufacturing is that it has democratized access to advanced technology. What once was available only to large corporations with massive IT budgets is now within reach for smaller businesses—thanks to the cloud.

The Example of Hosting Services

Take the example of website hosting. In the early days of the internet, only large companies with significant resources could afford to build and maintain their own servers to host their websites.

This meant that having a strong online presence was out of reach for smaller businesses like mom-and-pop shops.

However, with the advent of SaaS-based hosting services, all of that has changed. Now, any small business can easily sign up for a service like Squarespace, Wix, or Shopify—SaaS platforms that allow them to create, host, and manage a website without ever worrying about server infrastructure.

These platforms run on cloud computing infrastructure, meaning businesses no longer need to purchase expensive servers or hire technical staff to maintain them.

This democratization has allowed anyone—from the smallest local bakery to a family-owned hardware store—to have their own professional website and compete in the digital marketplace, , all of this for as little as $1/month.

The cost of setting up an online presence has plummeted, making it possible for even the smallest players to have access to the same technologies that used to be reserved for big corporations.

Democratizing Technology for Manufacturers

This same principle applies to manufacturing as well. Cloud computing in manufacturing and SaaS are opening doors for small manufacturing businesses that previously couldn’t afford advanced production or monitoring technologies.

Let’s look at another fictitious example: TwitteringSausages, a small sausage manufacturing business.

In the past, TwitteringSausages would never have been able to afford the sophisticated production monitoring software that larger companies use to track every stage of production, ensure quality control, and optimize efficiency.

The costs associated with purchasing servers, installing software, and maintaining the systems would have been far too high for a small operation.

However, because of cloud computing and the rise of SaaS, TwitteringSausages can now subscribe to a production monitoring platform on the cloud for a fraction of the cost.

With just a monthly fee, they can access all the powerful features of the software—real-time data on production lines, quality assurance, artificial intelligence and more—without having to worry about the underlying infrastructure.

This transformation is possible because cloud computing has made it incredibly cheap to scale software services.

When Salesforce invented the concept of SaaS in the late 1990s, they had to build and maintain their own servers, which required significant investment in hardware, data centers, and IT staff. This made SaaS initially accessible only to large businesses.

But today, thanks to cloud computing, anyone can create a SaaS offering without the need to own any physical infrastructure.

Platforms like AWS, Microsoft Azure, and Google Cloud allow developers to create, deploy, and scale applications without buying a single server. This has driven the cost of SaaS down dramatically, which is why services like production monitoring software are now affordable for even the smallest manufacturers.

Conclusion

Cloud computing has revolutionized industries by lowering the barriers to entry for advanced technologies. No longer is access to sophisticated software and infrastructure limited to companies with large IT budgets.

Today, anyone—from local mom-and-pop shops to small manufacturers like TwitteringSausages—can take advantage of cloud-powered solutions to run their businesses more efficiently, reduce costs, and stay competitive.

This democratization of technology is not only leveling the playing field but also empowering small businesses to innovate and thrive in ways that were never before possible.

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