Cloud-based Transit Systems Explained: What Are They And How Do They Work?

Cloud-based Transit Systems Explained: What Are They And How Do They Work?

Over the last decade, transport providers have made tremendous efforts to meet consumers’ needs for efficient and convenient mobility options in a world that’s becoming increasingly connected. Solutions powered by modern, cloud-based technology such as ridesharing programs and micromobility solutions have elevated consumer expectations to a whole new level. Riders now expect a streamlined digital experience with impeccable accuracy and real-time, actionable data to help them along their trips. While some businesses and organizations were quick to jump at the opportunity of migrating to solutions such as cloud computing, public transit has largely remained behind in reaping the benefits that come from implementing these newly available technologies. The majority of agencies today are still heavily reliant on hardware-laden, on-premise solutions, and with ridership levels lagging after the pandemic, it would seem that a change in the industry is needed to truly excel and thrive in today’s competitive landscape. In this article, we’re going to look at what cloud-based transit systems are, how they work, what are some of their benefits, and why they are the future of transit.

What is Cloud Computing?

Cloud computing refers to the delivery of different computing services on demand including servers, storage, databases, networking, software, analytics, and intelligence. This is essentially done through the use of the internet and many sectors and organizations have leveraged its capabilities to foster innovation in speed, resource flexibility, and scaling in economies. Cloud computing provides transit agencies with a viable alternative to conventional on-premises infrastructure by allowing them to access a multitude of computer resources as long as they have an internet connection. Thanks to technological advances, what initially began as simple cloud storage solutions has evolved into truly innovative and comprehensive cloud services that are reshaping many industries around the globe. Cloud-based services come in the form of subscriptions or various pay-as-you-go models tailored to meet the specific needs of each organization and industry. This helps businesses with the governance of their resources, allowing them to effectively manage their infrastructure with improved efficiency, lowering operational costs, and aiding with scaling.  

How Do Cloud-based Transit Systems Work?

Cloud-based transit systems allow agencies to quickly build, deploy, and scale various applications required for their operations such as web, mobile, and Application Programming Interface (API). Migrating to a cloud solution offers the opportunity to easily store, back up, and recover data of any scale and size by simply transferring it over the internet to an offsite cloud storage system that can be accessed from any location and device. Continuous streaming of high-definition video and audio lets agencies connect to their personnel, vehicles, devices, and passengers, ensuring consistent monitoring of real-time data, unfolding situations, and optimal performance of fleets and services. Deploying Software as a Service (SaaS) for on-demand services allows agencies to offer the latest software versions and updates to their customer base, at any given location or time. Comprehensive cloud-based solutions in transit encompass Account-based fare collection, Mobile ticketing, EMV – open-loop payments, CAD/AVL, DRT, MaaS, Public Transit Validators, Analytics, and POS. Mobile applications typically come as part of account-based fare collection systems. Apps that are offered under the SaaS operational model are highly customizable and can be tailored to the specific needs of each agency, something that makes running transit businesses of all sizes much easier.  

Advantages of Cloud-based Computing 

Cloud-based systems assist transit agencies in providing the digital tools needed to modernize their systems and operations, consisting of user-facing applications, technologies, and underlying infrastructure to improve efficiency and offer adequate, sustainable, and seamless transit experiences to riders. Modern solutions typically come with an integrated all-in-one, digital mobility infrastructure platform that equips transport providers with everything they need to scale up and down based on demand, allocating resources wherever needed as well as fostering innovation by adopting sustainable practices and more effective management of systems and daily operations. Systems that are fully migrated to the cloud combine a robust back end with a complete transit management suite that prioritizes data-fueled decision-making, advanced tools, analytics, security, and collaboration among different stakeholders.

Data-fueled Decision-making & Advanced Tools 

A highly interconnected network of digital infrastructure such as cameras and sensors ensures a consistent flow of data regarding real-time updates of road and vehicle conditions, travel data, or any unexpected events or accidents that are in the process of unfolding. City officials and public transportation authorities can make data-driven decisions as soon as any events occur such as delays, car accidents, or traffic jams. They can swiftly adjust routes to avoid further disturbances or delays, providing riders with consistent and reliable services that foster customer satisfaction and increase ridership. On the end user side, Cloud systems collecting IoT data can provide real-time updates about bus schedules, vehicle accident reports, and delay notices regardless of the time of day or their location. This keeps riders informed and with access to valuable data that lets them plan their journeys with ease and assurance, further promoting customer loyalty.

The Power of Machine Learning Algorithms & Analytics 

Analytics and machine learning algorithms can rapidly analyze all incoming data, helping transit operations observe traffic flow and plan their routes in the most efficient way. This helps offer services that are in demand, uncovering hidden trends, along with gaining a better understanding of customers’ preferences and usage patterns which can aid in the creation of better service offerings. Cloud-based systems are instrumental in breaking down silos and any previous barriers that once stood between different city departments or public and private entities. Collaboration between sectors is achieved with elevated speed, with data being unified across teams, divisions, and locations in the cloud. Agencies can exchange data with traffic authorities as well as emergency services. This will not only make cities smarter but also more safe and secure along with addressing mobility challenges such as traffic congestion, bad air quality, and CO2 emission levels.  

Increasing Sustainability & Operational Efficiency

Built-in Cloud-based geolocation technology aids with the tracking of entire bus fleets, trains, and trams so that management becomes simplified and effortless. Sensors embedded in hundreds of traffic lights, bridges, GPS devices, highway cameras, and vehicles constantly collect data and feed it back to the cloud. Locally processing all of that information would be extremely time-consuming if not next to impossible if done manually and there is always the chance of human error along with delays which could interfere with services. Cloud computing enables IoT devices to process and store information on remote Cloud servers as opposed to keeping it at a local server base. This eliminates the need for expensive physical infrastructure along with staff that would have been required to handle and maintain these systems. Cloud-based fleet management accounts for a significant portion of Cloud computing and various IoT applications in transportation. Since information regarding fleets is stored in a centralized system, transport providers can remotely monitor the health of their vehicles and get ahead of any potential issues or maintenance needs, reducing the chances of potential breakdowns, minimizing downtime, and ensuring the maximum lifespan of their assets. The increased efficiency in all systems and operations could lead to substantial savings in fuel, time, and valuable resources, increasing overall sustainability in the sector.  

Cloud Storage vs. On-premise Servers 

When it comes to choosing where a company’s data will be stored, businesses are faced with the decision of whether or not to opt for a traditional on-prem solution or go for a cloud-based one. On-premise provides organizations with the option of having their data stored locally, offering more control over sensitive data, and information. Since on-premises storage is entirely managed by the business all aspects of security, data protection and maintenance remain within the company. Cloud Storage data, on the other hand, is stored on the remote servers of the service providers and the responsibility for data protection lies with the service provider. Advanced security and encryption technologies are deployed to prevent potential cyberattacks and data leakages. It is widely considered that a large percentage of companies, both large and small, are more inclined to choose a cloud solution. A 2020 survey confirms that over 41% of enterprise workloads will migrate to public cloud platforms in the next several years, with another 22% opting for a hybrid option, which is a mix of on-premise and cloud service models.  

Costs & Maintenance

One of the biggest considerations for transit agencies regarding on-premise or cloud solutions typically comes down to cost and maintenance. For companies who choose to deploy an on-premises solution with physical infrastructure, it means that a substantial upfront investment will be required for hardware, the installation itself, software licensing fees, data backup, extra IT services, and support. Once this base is established, the agency bears responsibility for appointing a dedicated IT staff for support, maintenance, and security along with covering energy costs. Additionally, they will also need to rent a space where the servers will be housed along with any other physical assets. Further costs for hardware, software, and licensing updates and purchases should also be considered as regular expenses. For agencies of small sizes or larger ones struggling with funding, this kind of capital and ongoing investment can be a huge disadvantage. They would save funds from monthly subscription fees in cloud services, however, they would likely still pay for internet although at a lower cost and speed since their infrastructure wouldn’t demand as much bandwidth for accessing files stored in cloud-based services. 

One of the main benefits of opting for a cloud provider when it comes to expenses is that there are no large upfront costs. Agencies can pay monthly subscription fees as they go while taking advantage of the numerous resources and functionalities that come with their subscription package. This normally covers maintenance, regular updates of software, security, and support, meaning that transit agencies can save a significant amount of time troubleshooting problems as well as alleviate this burden from their staff. The majority of cloud service providers have large storage capacity in their base subscriptions, along with benefits like robust security strategy, file sharing, and all the other functionalities that come with cloud solutions. Being on the cloud is generally considered to be cheaper in some instances than on-premises storage/server use, as there are no additional costs for cooling, physical space, electricity bills, etc.  


With the rapid digitization of many industries and the increasing connectivity of devices and systems, cybersecurity is becoming a top priority for businesses of all sizes, regardless if their data center is part of an on-premise solution or is on the cloud. On-premise security typically refers to a company’s cybersecurity strategy that involves securing all physical and digital assets in the form of infrastructure, protecting them from any potential external and internal threats. This can include everything from securing physical infrastructure such as buildings to implementing robust firewalls and antivirus software for digital assets. Organizations that prefer on-premises solutions often feel that by keeping everything onsite they have more control over their assets and that they are more secure. This also implies that the company bears responsibility for creating a security system that requires a high level of security expertise and they will be the ones handling the maintenance of their network and the motoring of their assets both physical and digital. Agencies will need advanced security tools to build a robust firewall, as well as encryption and secure access control. This option can be very time-consuming and expensive in the long run.  

Cloud security, on the other hand, incorporates a set of guidelines, practices, and technologies designed to safeguard the company’s cloud computing infrastructures, applications, and data from any unauthorized access, theft, or cyber threats. While some businesses may be reluctant to migrate to this solution, cloud security is generally considered a better and more cost-effective option, alleviating agencies of the responsibilities that come with managing their digital infrastructure and assets. According to a study published by Gartner, cloud service workloads in the public sector will experience around 60% fewer security incidents than those in traditional on-premise data centers. Cloud providers nowadays offer modern multi-faceted security measures that include access control systems, continual threat monitoring, and encryption for data in transit and that which is stored. Other advanced tools consist of data redundancy measures, application, and network security as well as the monitoring of any suspicious login and activity. Continuous validation across systems is ensured and there is protection against mass file deletion and loss of data. In contrast to on-premises storage, cloud service providers have a dedicated team of global cybersecurity experts who are highly trained and skilled to safeguard a business’s assets and data at all times.  

Regulatory Compliance 

Staying compliant whether you’re dealing with local, international, or industry-specific regulations is important for any kind of business. This is an area where specialized knowledge and expertise are required and it could be a rather costly option if a business is using the on-prem infrastructure. This means that they’ll have to ensure that all systems are properly configured and maintained by trained staff and up-to-date with regulatory compliance protocols. Adhering to compliance standards requires staff that is competent and familiar with the regulations of a particular industry and they will also need to continuously monitor systems/logins along with establishing incident procedures and applying data encryption. If something goes wrong, the responsibility remains with the company itself, as they are the ones who are looking after the servers and storage. Furthermore, being out of compliance can result in a series of inspections and fines which can add unnecessary costs to a business.  

Opting for a compliant cloud provider can alleviate a lot of the pressure from agencies not only in terms of reducing costs but in also keeping up with constant regulations, changes, and standards. In contrast to on-premise solutions, good cloud providers typically have a designated team of experts who have compliance certifications in numerous crucial industries, including health, government, finance, education, manufacturing, and media. Those kinds of groups also regularly engage with governments, regulators, standards bodies, and non-governmental organizations around the globe and are more likely to be aware of potential changes to regulations or new trends.

Scalability & Reliability 

Scaling up can look very different depending on whether a company is using an on-premises solution or they’ve opted for a cloud one. Once the on-prem infrastructure is unable to withstand the dynamics of its changing workload, the organization will need to scale by adding resources like additional hardware and software that will increase the capacity for memory and computing power. Expanding these resources will require substantial funds, extensive labor, expertise, procurement, hardware, software, and monitoring of systems, not to mention it would all be extremely time-consuming. Furthermore, if a spike in demand turns out to be temporary, the company’s efforts will prove to be rather inefficient. In stark contrast, cloud storage eliminates the need to frame and arrange servers. Agencies can effortlessly scale various workloads based on specific metrics and requirements, with just a few clicks by leveraging the built-in features of cloud solutions. This kind of flexibility allows transport providers to reduce costs associated with the monitoring and scaling of resources along with removing the need for manual labor.  

Reliability is another crucial factor when deciding what solution is better for your business. Access to servers needs to be based on a robust, secure, and reliable connection, ensuring that a constant flow of data and information is possible along with offering a quality user experience. On-premises looks appealing to some due to its ability to be up and running without the need for internet so employees on site can all gain access to it. This, unfortunately, excludes remote workers and the need for backup power, such as a generator and a backup system for storage only increases costs and consumption of power. Cloud storage, on the other hand, needs a fast, reliable, and secure connection otherwise an agency will not be able to gain access to its files, or in the case of a bad connection, it will be much harder to do so. Sudden loss of connectivity can delay operations and decrease productivity, leading to customer dissatisfaction. When opting for a cloud-based solution, agencies must be diligent in finding a good internet provider before migrating.  

Accessibility & Data Back-up

Remote access is a notion that’s highly considered among transport providers when choosing whether or not to switch to the cloud. If the majority of an organization’s work is carried out on-site, in an office, and rarely online, an on-premise solution might be fine for such purposes. That’s hardly the case nowadays, however, as the increase in digitization of services and operations in response to changing consumer needs is rapidly shifting trends to migrating to the cloud. On-premise solutions might provide some benefits such as faster upload and download of larger files and video footage. Still, in instances such as a potential disaster or COVID-19, remote work might severely overwhelm the VPN system.  

Cloud storage enables agencies to have what we call a virtual desktop. Employees can access all office-related tasks through the cloud server as long as they have an internet connection. This provides several advantages over on-premise systems since it’s more flexible, highly convenient, and can be achieved remotely which could be a game changer in keeping operations running during events such as a pandemic. Employees who will be using it frequently from home can do so without the need for a VPN. Cloud servers are also highly suitable for running applications that demand constant access. Furthermore, the cloud facilitates seamless file sharing among participants, real-time collaboration, and better version control. There are cloud storage providers that offer differential sync, which significantly reduces the time required for uploading and bandwidth used when making alterations to huge files. 

When it comes to backing up data and disaster recovery, it’s one of those scenarios that can turn truly horrific for businesses if mishandled. A study found that about half of all companies lack preparation in adequately addressing a potential disaster by having a robust recovery plan in place. With on-premises storage systems, data is essentially stored on an internal server, something that can put companies at even greater risk in a disaster scenario or a cyberattack leading to significant exposure or loss of data. Some businesses that choose to keep storage on-premises have taken things a step further by having an off-site backup server as a way of avoiding data loss. Cloud solutions are considered a more reliable option for businesses due to their abundance of built-in features for redundancy, failover, backup, automatic logging, and monitoring, ensuring a shorter recovery time as opposed to on-premises alternatives. 

Integrating Apps & Legacy Systems 

When choosing a storage solution, many businesses are reluctant to switch fully to the cloud, mainly because the majority of their applications come with formats that can be slow to transfer to other systems. A survey shows that 84% of enterprises name integration as a primary factor that influences their decision of how to modernize their digital infrastructure and applications. Say that a business has a legacy line of business (LOB) apps that link directly to their local file server and they cannot make the switch and let go of their old software just yet, it means their legacy systems will need to remain on-premise for the time being. In the case of hybrid solutions, applications and data can be transferred between on-premise servers and public clouds, providing greater flexibility and additional options for deployment. Agencies can keep files associated with on-premises LOB software while the rest of their files and documents can be stored in the cloud. For those ready to modernize their entire infrastructure, cloud-based apps go way beyond just file storage. Cloud service providers are ready to incur the cost of maintaining, implementing, and supporting a company’s software for them.  

Is the Future For Transit Providers On The Cloud?

Both on-prem and cloud computing provide agencies with the IT infrastructure they require. The final choice of the cloud versus on-premises model will likely depend on the agency’s specific use cases for data use and storage as well as the level of security they require to meet compliance standards. Budget is also likely to play a vital role but in the future it’s more likely that cloud solutions will dominate the transit market as technologies evolve to meet increasing consumer demand for speed, connectivity, and better user experience. The services modern cloud providers offer are simply superior when compared to on-prem solutions in both functionality and maintenance as cloud-based transit systems take a significant workload off the hands of agencies along with some cost-saving along the way. As cities around the globe become smarter, more digitized, and interconnected, it’s likely that urban mobility and public transport will also head in the direction of modernizing infrastructure, upgrading systems, and introducing newer services and technologies that improve the lives of citizens and drive innovation in the sector.