Embitel Technologies emphasizes the critical role of cloud backend in IoT solutions, highlighting its capacity to store and process large data streams sourced from IoT gateways. The document discusses the integration of complex functionalities, such as machine learning, into IoT cloud applications, which can resolve intricate business challenges across various sectors. Additionally, it outlines best practices for IoT cloud application development, including database management, application security, and scalability to ensure efficient data handling and robust security measures.