presentation meaning of definition

US:USA pronunciation: respellingUSA pronunciation: respelling(prez′ən tā shən, prē′zen-)

Forum discussions with the word(s) "presentation" in the title:

In other languages: | | | | | | | | | | | | | | | |

What is a Presentation? | Definition, Elements & Tips

Masha has been a teacher and tutor, mostly focusing on ELA, for about two decades. She holds a B.A. in Psychology from Pomona College, an M.A.T. in English Education from Boston University, an M.A. in English from Middlebury College's Bread Loaf School of English, and an M.Ed. in Arts in Education from the Harvard Graduate School of Education. At Bread Loaf, she received a fellowship from the National Academy for Excellent Teaching. At the Harvard Graduate School of Education, she received an Urban Scholars Fellowship. She holds English teaching certification in Massachusetts and New York.

Table of Contents

What is a presentation, elements of a presentation, tips for giving presentations, lesson summary.

One could define a '' presentation '' as a talk given out loud by one or more people. There are many scenarios that involve presentations. A presentation can be given in a classroom as a class assignment, or a presentation can be given in a meeting in a work setting. The definition or meaning of a formal presentation is a presentation that one has had time to prepare for. One has generally been asked in advance to give the presentation, and one has practiced for the presentation being given. In terms of what a presentation is in an informal scenario, an informal presentation is one for which there has been little or no time to prepare, conducted in a more improvised manner. It is more similar to a conversation than a formal presentation.

What is Presenting?

One could define presenting as the action of giving a presentation. Once someone has put together a presentation, it is delivered out loud, generally to a group of people. For example, someone could put together a presentation about a topic and then give the presentation to an audience interested in that topic. Here, it is important to put in work behind the scenes to create an informative presentation before finally presenting it in front of the group.

To unlock this lesson you must be a Study.com Member. Create your account

Presentations are thoughtfully put together to provide information in an engaging way. Important elements of a presentation include:

• Method—Method refers to how a presentation is delivered (in person, over the internet, or recorded in advance, for instance).
• Context—Context considers presentation aspects such as where and when the presentation will take place, whether it will take place live, and what people would like to learn from the presentation.
• Message—The message is the central idea of the presentation that the presenter would like the audience to remember.
• Presenter—The presenter(s) delivers the presentation to an audience.
• Audience—The audience is the group of people to whom the presenter is giving the presentation.

Visual elements are images included in a presentation to add interest and to display information in an understandable way. Visual elements that can be included in a presentation include:

• Photographs—Photographs can be used to realistically show an audience exactly what the presenter is discussing. For instance, if a presentation is trying to inspire interest in buying something, it helps to have quality photographs on hand of what the presenter wants to sell.
• Illustrations—Illustrations or artist-created images included in a presentation can add interest to a presentation and help a presenter explain an idea. Illustrations can also be included when wishing to include logos with one's particular branding design.
• Infographics—Infographics present information in a visual manner. They can contain data visualization (explained below) and also images and text. An educational presentation could use infographics to combine information with engaging visual impact.
• Graphs and charts—Graphs and charts are examples of data visualization (providing a helpful visual representation of a data set such as a pie chart showing percentages). Data visualization can be used within a presentation using infographics.
• Video—Including video(s) in a presentation can provide a chance for the audience to take a brief and entertaining break, or provide another presenter's perspective on the topic of the presentation. A video could also be a chance to present a story connected with the presentation topic.

These are some techniques that can be used to create and deliver engaging presentations:

• Practicing beforehand—Practicing helps the presenter see what a presentation will be like, allowing adjustments to the presentation based on each run-through. Additionally, the presentation will be more polished when presented in front of an audience if the presenter has had plenty of practice beforehand.
• Including examples or stories—An anecdote could be a good way to start off the presentation. Presenting examples while explaining various concepts can be a good way of helping the audience understand the concepts.
• Deciding when to give out handouts—Handouts can be helpful during a presentation, providing the audience with something they can refer to for more information. They also can be taken home by the audience so that information will not be forgotten. It is important to assess the flow of the presentation in order to find a good point for handouts to be given out.
• Deciding whether there will be time for audience questions—Audience questions can make a presentation interesting and applicable to the audience. There are also presentations that do not involve questions from the audience. One should make decisions in advance about whether questions will be a part of the presentation and about how to include audience questions. Preparing for expected audience questions is good practice.
• Having presentation notes—It is a good idea to have presentation notes written in advance. For some presentations, notes may not be necessary, but it may help to write down key points just in case. There are also presentations in which someone can read notes directly; this may also be worth practicing.

A presentation is a talk presented out loud. It can be given by one person or by a group of people. Presenting is the action of giving the presentation. Important organizational elements of a presentation are the method (how a presentation will be delivered: whether a presentation will be given in person to an audience, presented over the internet, or prerecorded), the message (a presentation's main point), the audience (for whom the presentation is intended for), the context (factors such as where and when a presentation will happen), and the presenter (who is giving the presentation). Visual elements are images included in a presentation in order to add information and engage the audience. Some visual elements that can be added to a presentation are photographs, examples of data visualization such as graphs and charts, types of infographics besides data visualization, illustrations, and videos.

Presentations happen in a variety of contexts, formal and informal. They can be given to audiences interested in learning about a topic or in business meetings. Formal presentations generally are requested in advance and require advance preparation. Informal presentations are generally more conversational and involve less advanced preparation. Having presentation notes on hand and practicing before giving a presentation are two helpful strategies for achieving presentation success. Some other strategies are including stories and examples when applicable and deciding in advance whether and how to include handouts and audience questions.

What are the types of presentation?

Eight styles of presentation are Visual, Instructor, Freeform, Coach, Connector, Storytelling, Takahashi, and Lessig. The type of presentation chosen can depend on the context of the presentation.

What are the three components of a presentation?

There are three main parts that comprise a presentation. These three components are the introduction, the body, and the conclusion.

How does one describe a presentation?

Writing a presentation description can be useful as a way of letting potential audiences for the presentation know about the presentation's main focus. It should be informative and engaging to readers.

Register to view this lesson

Unlock your education, see for yourself why 30 million people use study.com, become a study.com member and start learning now..

Already a member? Log In

Resources created by teachers for teachers

I would definitely recommend Study.com to my colleagues. It’s like a teacher waved a magic wand and did the work for me. I feel like it’s a lifeline.

What is a Presentation? | Definition, Elements & Tips Related Study Materials

• Related Topics

Browse by Courses

• 10th Grade English: Homework Help Resource
• 10th Grade English: Tutoring Solution
• Study.com PSAT Test Prep: Practice & Study Guide
• Study.com ACT® Test Prep: Practice & Study Guide
• Study.com SAT Test Prep: Practice & Study Guide
• 12th Grade English: Homework Help Resource
• Supplemental English: Study Aid
• CLEP English Literature Prep
• AP English Literature: Help and Review
• CLEP American Literature: Study Guide & Test Prep Course
• CLEP College Composition Prep
• AP English Literature: Homeschool Curriculum
• 9th Grade English: Homeschool Curriculum
• AP English Literature: Homework Help Resource
• AP English Literature: Tutoring Solution

Browse by Lessons

• Giving & Receiving Effective Feedback for Web Projects
• Writing a Research Paper: Sections & Length
• Bob Woodward's Biography, Watergate Scandal & Significance
• Ernest Gaines: Biography & Books
• Clifford Odets: Biography, Plays & Monologues
• Nelson Algren: Biography & Awards
• Citing a Source Within a Source
• Writing a Book | Overview, Steps & Guide
• Writing a Character Witness Letter | Overview & Example
• How to Write a Comic Book Script
• Hanging Indent | Definition, Examples & Uses

Create an account to start this course today Used by over 30 million students worldwide Create an account

Explore our library of over 88,000 lessons

• Foreign Language
• Social Science
• See All College Courses
• Common Core
• High School
• See All High School Courses
• College & Career Guidance Courses
• College Placement Exams
• Entrance Exams
• General Test Prep
• K-8 Courses
• Skills Courses
• Teacher Certification Exams
• See All Other Courses
• Create a Goal
• Create custom courses
• Get your questions answered

• Skip to main content
• Skip to primary sidebar

Business Jargons

A Business Encyclopedia

Presentation

Definition : A presentation is a form of communication in which the speaker conveys information to the audience. In an organization presentations are used in various scenarios like talking to a group, addressing a meeting, demonstrating or introducing a new product, or briefing a team. It involves presenting a particular subject or issue or new ideas/thoughts to a group of people.

It is considered as the most effective form of communication because of two main reasons:

• Use of non-verbal cues.
• Facilitates instant feedback.

Business Presentations are a tool to influence people toward an intended thought or action.

Parts of Presentation

• Introduction : It is meant to make the listeners ready to receive the message and draw their interest. For that, the speaker can narrate some story or a humorous piece of joke, an interesting fact, a question, stating a problem, and so forth. They can also use some surprising statistics.
• Body : It is the essence of the presentation. It requires the sequencing of facts in a logical order. This is the part where the speaker explains the topic and relevant information. It has to be critically arranged, as the audience must be able to grasp what the speaker presents.
• Conclusion : It needs to be short and precise. It should sum up or outline the key points that you have presented. It could also contain what the audience should have gained out of the presentation.

Purpose of Presentation

• To inform : Organizations can use presentations to inform the audience about new schemes, products or proposals. The aim is to inform the new entrant about the policies and procedures of the organization.
• To persuade : Presentations are also given to persuade the audience to take the intended action.
• To build goodwill : They can also help in building a good reputation

Factors Affecting Presentation

Audience Analysis

Communication environment, personal appearance, use of visuals, opening and closing presentation, organization of presentation, language and words, voice quality, body language, answering questions, a word from business jargons.

Presentation is a mode of conveying information to a selected group of people live. An ideal presentation is one that identifies and matches the needs, interests and understanding level of the audience. It also represents the facts, and figures in the form of tables, charts, and graphs and uses multiple colours.

Related terms:

• Verbal Communication
• Visual Communication
• Non-Verbal Communication
• Communication
• 7 C’s of Communication

Reader Interactions

Abbas khan says

October 2, 2022 at 11:33 pm

Thank you so much for providing us with brief info related to the presentation.

Farhan says

February 23, 2023 at 9:45 am

yusra shah says

July 3, 2023 at 2:04 am

it was helpful👍

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

• Presentation Skills
• Skills & Tools

Presentation skills can be defined as a set of abilities that enable an individual to: interact with the audience; transmit the messages with clarity; engage the audience in the presentation; and interpret and understand the mindsets of the listeners. These skills refine the way you put forward your messages and enhance your persuasive powers.

The present era places great emphasis on good presentation skills. This is because they play an important role in convincing the clients and customers. Internally, management with good presentation skills is better able to communicate the mission and vision of the organization to the employees.

Importance of Presentation Skills

Interaction with others is a routine job of businesses in today’s world. The importance of good presentation skills is established on the basis of following points:

• They help an individual in enhancing his own growth opportunities. In addition, it also grooms the personality of the presenter and elevates his levels of confidence.
• In case of striking deals and gaining clients, it is essential for the business professionals to understand the audience. Good presentation skills enable an individual to mold his message according to the traits of the audience. This increases the probability of successful transmission of messages.
• Lastly, business professionals have to arrange seminars and give presentations almost every day. Having good presentation skills not only increases an individual’s chances of success, but also enable him to add greatly to the organization.

How to Improve Presentation Skills

Development of good presentation skills requires efforts and hard work. To improve your presentation skills, you must:

• Research the Audience before Presenting: This will enable you to better understand the traits of the audience. You can then develop messages that can be better understood by your target audience. For instance, in case of an analytical audience, you can add more facts and figures in your presentation.
• Structure your Presentation Effectively: The best way to do this is to start with telling the audience, in the introduction, what you are going to present. Follow this by presenting the idea, and finish off the presentation by repeating the main points.
• Do a lot of Practice: Rehearse but do not go for memorizing the presentation. Rehearsals reduce your anxiety and enable you to look confident on the presentation day. Make sure you practice out loud, as it enables you to identify and eliminate errors more efficiently. Do not memorize anything as it will make your presentation look mechanical. This can reduce the degree of audience engagement.
• Take a Workshop: Most medium and large businesses allow their employees to take employee development courses and workshops, as well-trained employees are essential to the success of any company. You can use that opportunity to take a workshop on professional presentation skills such as those offered by Langevin Learning Services , which are useful for all business professionals, from employees to business trainers and managers.

Job profiles that require this skill

Not yet a member? Sign Up

join cleverism

Find your dream job. Get on promotion fasstrack and increase tour lifetime salary.

Post your jobs & get access to millions of ambitious, well-educated talents that are going the extra mile.

First name*

Company name*

Company Website*

E-mail (work)*

Login or Register

Password reset instructions will be sent to your E-mail.

What is a Presentation? Definition and examples

A presentation involves talking in front of a group of people to explain an idea, system, process, recent performance, forecast, or other topic. The person who does the explaining is the presenter and may use visual aids to help convey his or her message more effectively.

Moscow State Technical University has the following definition of the term:

“A presentation is a formal talk to one or more persons that “presents” ideas or information in a clear, structured way. All presentations have a common objective: they are given in order to inform, train, persuade or sell”

An event with prizes or awards

The term may also refer to an event in which qualifications, prizes, or awards are formally given to people who have achieved or won them. Somebody in an office might say, for example: “Harold is retiring next week. There will be a small presentation tomorrow.”

This means that Harold’s colleagues and bosses will be there to celebrate his retirement, thank him for his good work, and possibly give him a goodbye present. Typically, in this kind of event, there are drinks and food.

Presentation of a product

In the retail business , the term refers to how a product is presented to customers, consumers, and prospects. A prospect is somebody who might well turn into a paying customer.

For example, in supermarkets, donuts and croissants are typically presented in attractive boxes to make them more desirable and enticing. Marketing and merchandising professionals often say : “When selling something, presentation is everything.”

If you are selling your home, you need to make it as attractive as possible for possible buyers. Perhaps you will paint the walls, get a gardener, and maybe redecorate the hall. A good presentation can help speed up the sale.

This article focuses on the meaning of the term when it refers to presenting information to an audience.

An effective presentation

To be effective, presenters must make the best use of their relationship with their audience. It is crucial to know the audience members well, including their needs, if you want to capture their interest and develop their understanding and cooperation.

The University of Leicester says the following about effective presenters:

“An effective presentation makes the best use of the relationship between the presenter and the audience . It takes full consideration of the audience’s needs in order to capture their interest, develop their understanding, inspire their confidence and achieve the presenter’s objectives.”

Here are some suggestions that will help you deliver effective presentations:

If you are passionate about your topic, your audience will notice and are much more likely to feel a connection with you.

The world’s best presenters all say that it is crucial to connect with members of the audience. The best way to do this is with passion.

What are their needs?

People have come to watch and listen to you to satisfy their needs, rather than to find out how much you know. Before you even start preparing your presentation, you must find out what their needs are.

SKILLSYOUNEED says the following regarding what you know and your audience’s needs :

“As you prepare the presentation, you always need to bear in mind what the audience needs and wants to know, not what you can tell them.”

Preparation

The best presenters in the world make sure they have prepared thoroughly for each event. Just like a good play requires rehearsals, so does presenting information or ideas to a group of people.

If you can, practice on somebody or a small group of people. Perhaps the only volunteers you can find are members of your household. That’s fine; practice on them and ask for feedback.

If you talk too fast or keep scratching your head, you will probably not be aware, but other people will. It is best to find that out beforehand.

There are literally dozens of other components of a good presentation, such as:

• Having a strong opening.
• Editing your script ruthlessly.
• Using visual aids appropriately.
• Being yourself.
• Creating a structure that is easy to follow.
• Making eye contact.
• Distributing your eye contact equally.
• Keeping it simple.
• Projecting your voice effectively.
• Body language.
• Breathing properly.

Above all, make sure you enjoy it. If you don’t, your audience will soon realize, which is the kiss of death as far as presentations are concerned.

If you are ambitious regarding your career, eventually you will have to present to audiences. C-level executives, for example, have to do it all the time . A C-level executive is a top corporate officer in a business, such as a CEO, CIO, CFO, i.e., an executive whose job title begins with the letter ‘C’.

Share this:

• Renewable Energy
• Artificial Intelligence
• 3D Printing
• Financial Glossary

Misinformation and disinformation

Misinformation is false or inaccurate information—getting the facts wrong. Disinformation is false information which is deliberately intended to mislead—intentionally misstating the facts.

The spread of misinformation and disinformation has affected our ability to improve public health, address climate change, maintain a stable democracy, and more. By providing valuable insight into how and why we are likely to believe misinformation and disinformation, psychological science can inform how we protect ourselves against its ill effects.

APA resolution

Combating misinformation and promoting psychological science literacy

Approved by APA Council of Representatives, February 2024

Using psychological science to understand and fight health misinformation

This report describes the best available psychological science on misinformation, particularly as it relates to health.

It offers eight specific recommendations to help scientists, policymakers, and health professionals respond to the ongoing threats posed by misinformation.

Is it safe to get health advice from influencers?

Eight specific ways to combat misinformation

Factors that make people believe misinformation

How and why does misinformation spread?

Magination Press children’s book

True or False? The Science of Perception, Misinformation, and Disinformation

Written for preteens and young teens in lively text accompanied by fun facts, this book explores what psychology tells us about development and persistence of false perceptions and beliefs and the difficulty of correcting them, plus ways to debunk misinformation and think critically and factually about the world around us.

Advice to stem misinformation

What employers can do to counter election misinformation in the workplace

Using psychological science to fight misinformation: A guide for journalists

More from APA

Psychology is leading the way on fighting misinformation

This election year, fighting misinformation is messier and more important than ever

Stopping the spread of misinformation

The anatomy of a misinformation attack

Webinars and presentations

Tackling Misinformation Ahead of Election Day

APA and the Civic Alliance collaborated to address the impact of mis- and disinformation on our democracy. APA experts discussed the psychology behind how mis- and disinformation occurs, and why we should care.

Building Back Trust in Science: Community-Centered Solutions

APA collaborated with American Public Health Association, National League of Cities, and Research!America to host a virtual national conversation about the psychology and impact of misinformation on public health.

Fighting Misinformation With Psychological Science

Psychological science is playing a key role in the global cooperative effort to combat misinformation and change the course on how we’re tackling critical societal issues.

Studying misinformation

Explore the latest psychological research on misinformation and disinformation

How long does gamified psychological inoculation protect people against misinformation?

Perceptions of fake news, misinformation, and disinformation amid the COVID-19 pandemic: A qualitative exploration

Quantifying the effects of fake news on behavior: Evidence from a study of COVID-19 misinformation

Countering misinformation and fake news through inoculation and prebunking

Who is susceptible to online health misinformation? A test of four psychosocial hypotheses

It might become true: How prefactual thinking licenses dishonesty

Federal resources

• Centers for Disease Control and Prevention How to address Covid -19 vaccine misinformation
• U.S. Surgeon General Health misinformation

Resources from other organizations

• AARP Teaching students how to spot misinformation
• American Public Health Association Podcast series: Confronting our disease of disinformation Part 1 | Part 2 | Part 3 | Part 4
• News Literacy Project Webinar: Your brain and misinformation: Why people believe lies and conspiracy theories
• NPC Journalism Institute Webinar: Disinformation, midterms & the mind: How psychology can help journalists fight misinformation

To find a researcher studying misinformation and disinformation, please contact our press office .

• Cambridge Dictionary +Plus

English Dictionary

Get clear definitions and audio pronunciations of words, phrases, and idioms in British and American English from the three most popular Cambridge dictionaries of English with just one search: the Cambridge Advanced Learner’s Dictionary, the Cambridge Academic Content Dictionary, and the Cambridge Business English Dictionary.

Popular searches

• 05 schedule
• 07 experience
• 09 Billings
• 10 pronunciation

Browse the English Dictionary

Or, browse the Cambridge Dictionary index

Key features

The Cambridge English Dictionary is based on original research on the unique Cambridge English Corpus , and includes all the words at CEFR levels A1–C2 in the English Vocabulary Profile . It’s ideal for anyone preparing for advanced-level Cambridge Exams or IELTS .

Acknowledgements

The dictionaries that you can search together as English on this Cambridge Dictionary website are:

Cambridge Advanced Learner’s Dictionary, 4th Edition

Cambridge Academic Content Dictionary

Cambridge Business English Dictionary

Worse than or worst of all? How to use the words ‘worse’ and ‘worst’

Word of the Day

Your browser doesn't support HTML5 audio

to move the pedals (= parts you operate with your feet) backwards on a bicycle

Free word lists and quizzes to create, download and share!

You’re logged in. Start creating a word list or do a quiz!

Learn more with +Plus

• Recent and Recommended {{#preferredDictionaries}} {{name}} {{/preferredDictionaries}}
• Definitions Clear explanations of natural written and spoken English English Learner’s Dictionary Essential British English Essential American English
• Grammar and thesaurus Usage explanations of natural written and spoken English Grammar Thesaurus
• Pronunciation British and American pronunciations with audio English Pronunciation
• English–Chinese (Simplified) Chinese (Simplified)–English
• English–Chinese (Traditional) Chinese (Traditional)–English
• English–Dutch Dutch–English
• English–French French–English
• English–German German–English
• English–Indonesian Indonesian–English
• English–Italian Italian–English
• English–Japanese Japanese–English
• English–Norwegian Norwegian–English
• English–Polish Polish–English
• English–Portuguese Portuguese–English
• English–Spanish Spanish–English
• English–Swedish Swedish–English
• Dictionary +Plus Word Lists

• Skip to secondary menu
• Skip to main content
• Skip to primary sidebar

Statistics By Jim

Making statistics intuitive

What is the Mean and How to Find It: Definition & Formula

By Jim Frost 4 Comments

What is the Mean?

The mean in math and statistics summarizes an entire dataset with a single number representing the data’s center point or typical value. It is also known as the arithmetic mean, and it is the most common measure of central tendency. It is frequently called the “average.”

Learn how to find the mean and know when it is and is not a good statistic to use!

How to Find the Mean

Finding the mean is very simple. Just add all the values and divide by the number of observations. The mean formula is below:

For example, if the heights of five people are 48, 51, 52, 54, and 56 inches. Here’s how to find the mean:

48 + 51 + 52 + 54 + 56 / 5 = 52.2

Their average height is 52.2 inches.

Mean Formula

There are two versions of the mean formula in math—the sample and population formulas. In each case, the process for how to find the mean mathematically does not change. Add the values and divide by the number of values. However, the formula notation differs between the two types.

Sample Mean Formula

The sample mean formula is the following:

• x̄ is the sample average of variable x.
• ∑x n = sum of n values.
• n = number of values in the sample.

Typically, the sample formula notation uses lowercase letters.

Population Mean Formula

The population mean formula is the following:

• µ is the population average.
• ∑X N = sum of N values.
• N = number of values in the population.

Typically, the population mean formula notation uses Greek and uppercase letters.

Learn more in depth about Sample Mean vs. Population Mean .

When Do You Use the Average?

Ideally, the mean in math (aka the average) indicates the region where most values in a distribution fall. Statisticians refer to it as the central location of a distribution. You can think of it as the tendency of data to cluster around a middle value. The histogram below illustrates the average accurately finding the center of the data’s distribution.

However, the average does not always find the center of the data. It is sensitive to skewed data and extreme values. For example, when the data are skewed, it can miss the mark. In the histogram below, the average is outside the area with the most common values.

This problem occurs because outliers have a substantial impact on the mean. Extreme values in an extended tail pull it away from the center. As the distribution becomes more skewed, the average is drawn further away from the center.

In these cases, the average can be misleading because it might not be near the most common values. Consequently, it’s best to use the average to measure the central tendency when you have a symmetric distribution.

For skewed distributions , it’s often better to use the median or trimmed mean , which use different methods to find the central location. Note that the average provides no information about the variability present in a distribution. To evaluate that characteristic, assess the standard deviation .

Relate post : Measures of Central Tendency

Using Sample Means to Estimate Population Means

In statistics, analysts often use a sample average to estimate a population mean. For small samples, the sample can differ greatly from the population. However, as the sample size grows, the law of large numbers states that the sample average is likely to be close to the population value.

Hypothesis tests , such as t-tests and ANOVA , use samples to determine whether population means are different. Statisticians refer to this process of using samples to estimate the properties of entire populations as inferential statistics .

Related post : Descriptive Statistics Vs. Inferential Statistics

In statistics, we usually use the arithmetic average, which is the type I focus on this post. However, there are other types of averages, including the geometric version. Read my post about the geometric mean to learn more . There is also a weighted mean .

Now that you know about statistical mean, learn about regression to the mean . That’s the tendency for extreme events to be followed by more typical occurrences.

Share this:

Reader Interactions

December 6, 2023 at 9:12 am

What is name of the, that write this books?

December 4, 2023 at 1:34 am

When was this published ?

December 4, 2023 at 1:38 am

When citing online resources, you typically use an “Accessed” date rather than a publication date because online content can change over time. For more information, read Purdue University’s Citing Electronic Resources .

January 29, 2023 at 12:49 am

Great explanation, Jim!

Comments and Questions Cancel reply

What is cloud computing?

With cloud computing, organizations essentially buy a range of services offered by cloud service providers (CSPs). The CSP’s servers host all the client’s applications. Organizations can enhance their computing power more quickly and cheaply via the cloud than by purchasing, installing, and maintaining their own servers.

The cloud-computing model is helping organizations to scale new digital solutions with greater speed and agility—and to create value more quickly. Developers use cloud services to build and run custom applications and to maintain infrastructure and networks for companies of virtually all sizes—especially large global ones. CSPs offer services, such as analytics, to handle and manipulate vast amounts of data. Time to market accelerates, speeding innovation to deliver better products and services across the world.

What are examples of cloud computing’s uses?

Get to know and directly engage with senior mckinsey experts on cloud computing.

Brant Carson is a senior partner in McKinsey’s Vancouver office; Chandra Gnanasambandam and Anand Swaminathan are senior partners in the Bay Area office; William Forrest is a senior partner in the Chicago office; Leandro Santos is a senior partner in the Atlanta office; Kate Smaje is a senior partner in the London office.

Cloud computing came on the scene well before the global pandemic hit, in 2020, but the ensuing digital dash  helped demonstrate its power and utility. Here are some examples of how businesses and other organizations employ the cloud:

• A fast-casual restaurant chain’s online orders multiplied exponentially during the 2020 pandemic lockdowns, climbing to 400,000 a day, from 50,000. One pleasant surprise? The company’s online-ordering system could handle the volume—because it had already migrated to the cloud . Thanks to this success, the organization’s leadership decided to accelerate its five-year migration plan to less than one year.
• A biotech company harnessed cloud computing to deliver the first clinical batch of a COVID-19 vaccine candidate for Phase I trials in just 42 days—thanks in part to breakthrough innovations using scalable cloud data storage and computing  to facilitate processes ensuring the drug’s safety and efficacy.
• Banks use the cloud for several aspects of customer-service management. They automate transaction calls using voice recognition algorithms and cognitive agents (AI-based online self-service assistants directing customers to helpful information or to a human representative when necessary). In fraud and debt analytics, cloud solutions enhance the predictive power of traditional early-warning systems. To reduce churn, they encourage customer loyalty through holistic retention programs managed entirely in the cloud.
• Automakers are also along for the cloud ride . One company uses a common cloud platform that serves 124 plants, 500 warehouses, and 1,500 suppliers to consolidate real-time data from machines and systems and to track logistics and offer insights on shop floor processes. Use of the cloud could shave 30 percent off factory costs by 2025—and spark innovation at the same time.

That’s not to mention experiences we all take for granted: using apps on a smartphone, streaming shows and movies, participating in videoconferences. All of these things can happen in the cloud.

Learn more about our Cloud by McKinsey , Digital McKinsey , and Technology, Media, & Telecommunications  practices.

How has cloud computing evolved?

Going back a few years, legacy infrastructure dominated IT-hosting budgets. Enterprises planned to move a mere 45 percent of their IT-hosting expenditures to the cloud by 2021. Enter COVID-19, and 65 percent of the decision makers surveyed by McKinsey increased their cloud budgets . An additional 55 percent ended up moving more workloads than initially planned. Having witnessed the cloud’s benefits firsthand, 40 percent of companies expect to pick up the pace of implementation.

The cloud revolution has actually been going on for years—more than 20, if you think the takeoff point was the founding of Salesforce, widely seen as the first software as a service (SaaS) company. Today, the next generation of cloud, including capabilities such as serverless computing, makes it easier for software developers to tweak software functions independently, accelerating the pace of release, and to do so more efficiently. Businesses can therefore serve customers and launch products in a more agile fashion. And the cloud continues to evolve.

Introducing McKinsey Explainers : Direct answers to complex questions

Cost savings are commonly seen as the primary reason for moving to the cloud but managing those costs requires a different and more dynamic approach focused on OpEx rather than CapEx. Financial-operations (or FinOps) capabilities  can indeed enable the continuous management and optimization of cloud costs . But CSPs have developed their offerings so that the cloud’s greatest value opportunity is primarily through business innovation and optimization. In 2020, the top-three CSPs reached $100 billion  in combined revenues—a minor share of the global $2.4 trillion market for enterprise IT services—leaving huge value to be captured. To go beyond merely realizing cost savings, companies must activate three symbiotic rings of cloud value creation : strategy and management, business domain adoption, and foundational capabilities.

What’s the main reason to move to the cloud?

The pandemic demonstrated that the digital transformation can no longer be delayed—and can happen much more quickly than previously imagined. Nothing is more critical to a corporate digital transformation than becoming a cloud-first business. The benefits are faster time to market, simplified innovation and scalability, and reduced risk when effectively managed. The cloud lets companies provide customers with novel digital experiences—in days, not months—and delivers analytics absent on legacy platforms. But to transition to a cloud-first operating model, organizations must make a collective effort that starts at the top. Here are three actions CEOs can take to increase the value their companies get from cloud computing :

• Establish a sustainable funding model.
• Develop a new business technology operating model.
• Set up policies to attract and retain the right engineering talent.

How much value will the cloud create?

Fortune 500 companies adopting the cloud could realize more than $1 trillion in value  by 2030, and not from IT cost reductions alone, according to McKinsey’s analysis of 700 use cases.

For example, the cloud speeds up design, build, and ramp-up, shortening time to market when companies have strong DevOps (the combination of development and operations) processes in place; groups of software developers customize and deploy software for operations that support the business. The cloud’s global infrastructure lets companies scale products almost instantly to reach new customers, geographies, and channels. Finally, digital-first companies use the cloud to adopt emerging technologies and innovate aggressively, using digital capabilities as a competitive differentiator to launch and build businesses .

If companies pursue the cloud’s vast potential in the right ways, they will realize huge value. Companies across diverse industries have implemented the public cloud and seen promising results. The successful ones defined a value-oriented strategy across IT and the business, acquired hands-on experience operating in the cloud, adopted a technology-first approach, and developed a cloud-literate workforce.

Learn more about our Cloud by McKinsey and Digital McKinsey practices.

What is the cloud cost/procurement model?

Some cloud services, such as server space, are leased. Leasing requires much less capital up front than buying, offers greater flexibility to switch and expand the use of services, cuts the basic cost of buying hardware and software upfront, and reduces the difficulties of upkeep and ownership. Organizations pay only for the infrastructure and computing services that meet their evolving needs. But an outsourcing model  is more apt than other analogies: the computing business issues of cloud customers are addressed by third-party providers that deliver innovative computing services on demand to a wide variety of customers, adapt those services to fit specific needs, and work to constantly improve the offering.

What are cloud risks?

The cloud offers huge cost savings and potential for innovation. However, when companies migrate to the cloud, the simple lift-and-shift approach doesn’t reduce costs, so companies must remediate their existing applications to take advantage of cloud services.

For instance, a major financial-services organization  wanted to move more than 50 percent of its applications to the public cloud within five years. Its goals were to improve resiliency, time to market, and productivity. But not all its business units needed to transition at the same pace. The IT leadership therefore defined varying adoption archetypes to meet each unit’s technical, risk, and operating-model needs.

Legacy cybersecurity architectures and operating models can also pose problems when companies shift to the cloud. The resulting problems, however, involve misconfigurations rather than inherent cloud security vulnerabilities. One powerful solution? Securing cloud workloads for speed and agility : automated security architectures and processes enable workloads to be processed at a much faster tempo.

What kind of cloud talent is needed?

The talent demands of the cloud differ from those of legacy IT. While cloud computing can improve the productivity of your technology, it requires specialized and sometimes hard-to-find talent—including full-stack developers, data engineers, cloud-security engineers, identity- and access-management specialists, and cloud engineers. The cloud talent model  should thus be revisited as you move forward.

Six practical actions can help your organization build the cloud talent you need :

• Find engineering talent with broad experience and skills.
• Balance talent maturity levels and the composition of teams.
• Build an extensive and mandatory upskilling program focused on need.
• Build an engineering culture that optimizes the developer experience.
• Consider using partners to accelerate development and assign your best cloud leaders as owners.
• Retain top talent by focusing on what motivates them.

How do different industries use the cloud?

Different industries are expected to see dramatically different benefits from the cloud. High-tech, retail, and healthcare organizations occupy the top end of the value capture continuum. Electronics and semiconductors, consumer-packaged-goods, and media companies make up the middle. Materials, chemicals, and infrastructure organizations cluster at the lower end.

Nevertheless, myriad use cases provide opportunities to unlock value across industries , as the following examples show:

• a retailer enhancing omnichannel  fulfillment, using AI to optimize inventory across channels and to provide a seamless customer experience
• a healthcare organization implementing remote heath monitoring to conduct virtual trials and improve adherence
• a high-tech company using chatbots to provide premier-level support combining phone, email, and chat
• an oil and gas company employing automated forecasting to automate supply-and-demand modeling and reduce the need for manual analysis
• a financial-services organization implementing customer call optimization using real-time voice recognition algorithms to direct customers in distress to experienced representatives for retention offers
• a financial-services provider moving applications in customer-facing business domains to the public cloud to penetrate promising markets more quickly and at minimal cost
• a health insurance carrier accelerating the capture of billions of dollars in new revenues by moving systems to the cloud to interact with providers through easier onboarding

The cloud is evolving  to meet the industry-specific needs of companies. From 2021 to 2024, public-cloud spending on vertical applications (such as warehouse management in retailing and enterprise risk management in banking) is expected to grow by more than 40 percent annually. Spending on horizontal workloads (such as customer relationship management) is expected to grow by 25 percent. Healthcare and manufacturing organizations, for instance, plan to spend around twice as much on vertical applications as on horizontal ones.

Learn more about our Cloud by McKinsey , Digital McKinsey , Financial Services , Healthcare Systems & Services , Retail , and Technology, Media, & Telecommunications  practices.

What are the biggest cloud myths?

Views on cloud computing can be clouded by misconceptions. Here are seven common myths about the cloud —all of which can be debunked:

• The cloud’s value lies primarily in reducing costs.
• Cloud computing costs more than in-house computing.
• On-premises data centers are more secure than the cloud.
• Applications run more slowly in the cloud.
• The cloud eliminates the need for infrastructure.
• The best way to move to the cloud is to focus on applications or data centers.
• You must lift and shift applications as-is or totally refactor them.

How large must my organization be to benefit from the cloud?

Here’s one more huge misconception: the cloud is just for big multinational companies. In fact, cloud can help make small local companies become multinational. A company’s benefits from implementing the cloud are not constrained by its size. In fact, the cloud shifts barrier to entry skill rather than scale, making it possible for a company of any size to compete if it has people with the right skills. With cloud, highly skilled small companies can take on established competitors. To realize the cloud’s immense potential value fully, organizations must take a thoughtful approach, with IT and the businesses working together.

For more in-depth exploration of these topics, see McKinsey’s Cloud Insights collection. Learn more about Cloud by McKinsey —and check out cloud-related job opportunities if you’re interested in working at McKinsey.

Articles referenced include:

• “ Six practical actions for building the cloud talent you need ,” January 19, 2022, Brant Carson , Dorian Gärtner , Keerthi Iyengar, Anand Swaminathan , and Wayne Vest
• “ Cloud-migration opportunity: Business value grows, but missteps abound ,” October 12, 2021, Tara Balakrishnan, Chandra Gnanasambandam , Leandro Santos , and Bhargs Srivathsan
• “ Cloud’s trillion-dollar prize is up for grabs ,” February 26, 2021, Will Forrest , Mark Gu, James Kaplan , Michael Liebow, Raghav Sharma, Kate Smaje , and Steve Van Kuiken
• “ Unlocking value: Four lessons in cloud sourcing and consumption ,” November 2, 2020, Abhi Bhatnagar , Will Forrest , Naufal Khan , and Abdallah Salami
• “ Three actions CEOs can take to get value from cloud computing ,” July 21, 2020, Chhavi Arora , Tanguy Catlin , Will Forrest , James Kaplan , and Lars Vinter

Want to know more about cloud computing?

Related articles.

Cloud’s trillion-dollar prize is up for grabs

The cloud transformation engine

Cloud cost-optimization simulator