Cloud computing has found a place in nearly every industry, from e-commerce and banking to automotive to healthcare, and all the processes in between. Research shows that cloud use in supply chains has increased dramatically over the past year, and doesn’t expect to slow down in 2013.

Dwight Klappich, research vice president for Gartner, explains that supply chain management has adopted cloud use quickly, with an estimated 40% increase in 2012 over 2011. He explains in a Logistics Management article watching this shift from more traditional software to the cloud:

Cloud computing on the rise in 2013

“Two to three years ago when we talked to shippers about software, the cloud was just one option. In many cases, cloud has now become a preference for companies.” He predicts that around 50% of the transportation subset of supply chains are currently cloud-based.

Shifting towards the cloud might seem daunting for those who manage supply chains, as most people worry over the security and availability of their data, but hosting with a cloud provider can actually help alleviate the pressures in those areas.

Hosting your data in-house means having to pay for all the physical and technical measures needed to ensure data security, as well as redundant hardware and functions in order to have the availability necessary to keep a business supply chain moving 24/7.

Providers already have these features in place, greatly reducing the expenses to the company. Since security and availability are part of the primary focus of the provider, their processes and systems are consistent and airtight. Coupled with cloud-based disaster recovery, if something does go wrong, data can quickly be reallocated and brought back up with very little downtime.

A cloud infrastructure also allows a company to pay for the services that they’re actually using, instead of putting costs toward an infrastructure with a fixed capacity, of which only a small percentage is being used. Conversely, scaling up becomes a much simpler process as well. With this convenience and lowering of capital expenses, it’s not shocking to see in the Gartner report that by 2016 cloud IaaS spending is going to grow 42%.

It’s important with so many cloud providers to choose from that companies are comfortable with the group they end up hosting with. Make sure to view the audit report of each provider to learn more about what safeguards are in place.

If you’re interested in more information about cloud computing, you can check out some tips for what to look for in a cloud hosting provider, or look at our private cloud wiki.