Business expectations are constantly changing, and most organizations demand ubiquitous access to their data; therefore the need for increased scalability, agility, automation, and efficiency make cloud computing cost-effective technology.
What started out as a popular buzzword, cloud computing is now one of the hottest topics in IT today. New dynamic, shared environments which can allocate a multitude of tasks accessed through a network have replaced the static, stand alone in-house servers and datacenters.
Business organizations have quickly grasped the concepts involved as well as the considerable cost saving potentials of this computing paradigm. Such saving potentials are based on the use of shared IT resources allocated to specific tasks and users. These occur in very competitive and economic markets.
So what are some of the initial and old fashioned cost saving strategies for cloud hosting?
- There are less administrative costs since cloud environments utilize high levels of automation.
- Public clouds, using a third-party vendor can deliver large amounts of data and business applications and services at a fraction of traditional costs.
- Operational costs are lower.
- Fewer servers are required because of increased efficiency.
However, these are only the obvious, so let’s explore a few more avenues. The cloud enables convenience on demand, and users have access to the computing resources of networks, servers, storage, applications, and other services. All of these services can be rapidly provisioned and released with minimal effort. The cost savings therefore include the following:
- Computing resources can be used as needed to deliver better efficiency in a shared network.
- Cloud computing eliminates capital expenses associated with building a server infrastructure and the upkeep associated with it for security, utilities, insurance, and personnel.
- There is no need to install new hardware as technology and organizational needs change.
- Projects deploy quicker using a self-serve control console.
- As business applications grow, the need for additional storage, RAM and CPU capacity can be scaled up with little effort or additional expense.
- Lower maintenance costs are associated with less hardware, outsourced IT staff, less use of physical resources, and fewer in-house IT experts.
- There is convenient access for disaster recovery to bring up a server in a separate datacenter should there be a primary data outage.
- Security controls are less expensive.
Even the cost savings of cloud computing for a small organization wanting to conduct business abroad without having to invest in expensive, dedicated infrastructure can be compelling. Virtual offices eliminate the need for overseas travel and setting up oversea offices. Business can be conducted without ever having to physically meet a business client across the globe. Business executives doing business abroad can then actually conduct meetings from their own homes, thus reducing overhead and work in collaboration with other executives. Cloud computing also affords a business owner the convenience of using PayPal to accept foreign payment instead of using foreign banks. Finally, in overseas business, VOIP technology enables reasonable fees whereas the cost for overseas telephone service could make many business dealings economically disastrous.
Other financial saving strategies can make cloud computing an exciting and “bean counting” alternative. As internal IT-staff no longer are needed to constantly engage in maintenance activities, these same professionals can transition to the development of new products and markets. Personnel will have a chance to test new applications, projects and business opportunities without having to install more hardware.
The on-demand nature of cloud computing allows businesses to simply pay for what they use. When an organization can power up or dial down at will, the money saving opportunities quickly add up. Companies have the advantage of increasing resources at peak seasons such as Christmas, Mother’s Day, Thanksgiving, etc. or dialing down in August when the largest population in the United States take their vacations. Companies don’t have to buy more servers to cover the busy times and then just let them sit dormant for the rest of the year.
So how do you know if you should move over to a cloud provider? Knowing if it is right for you requires some comparisons, since cloud providers run highly optimized operations. Consider the following:
- How much do you spend for on-premises servers?
- How much is spent on data center utilities which include power and cooling?
- How many IT staff members do you have and how much time do they spend on maintenance?
- How much is spent on security and compliance?
Also each business has to think about application growth expectations and how demand fluctuates in critical times. Consider the following:
- How many users for the application?
- Does the application have demand spike times?
- Are there seasonal spike times?
- What is the anticipated growth for the application?
There are a lot of cost reductions and advantages to cloud computing, and now small organizations have the same opportunities as giant companies to benefit from IT services and personnel that may have previously been out of their reach. Costs can be easily quantified, making the possibilities endless.