Could the cloud offer a cheaper way to run your IT? We investigate the economics of cloud computing.
Adopting cloud computing
The cloud is increasingly being used as an IT strategy, rather than by organisational requirements. And the choice of cloud and hosted services are many-fold and growing.
Security, continuity, availability and flexibility are all appealing reasons for adoption. But for most organisations, the economics of cloud computing are the main reason why they choose this route.
Economic advantages of cloud computing
Many organisations have small IT budgets, which typically remain static year-on-year. Cloud computing can bring better value for budget spending. It is typically a standardised cost that’s easy to predict. It, therefore, makes it easier for organisations to avoid budget overspend.
Obvious savings include the reduction of up-front investment in onsite storage and servers. Outsourced cloud services can also be classed as opex rather than capex, which can improve the appearance of an organisation’s finances, which may also be a plus for some.
Other savings are available longer-term. Unless you plan to set up your own cloud environment (not advised), outsourcing your cloud requirements means outsourcing the maintenance of that environment. Fixing hardware can be expensive and time-consuming in terms of business disruption, and rarely happens at a convenient time.
Meanwhile, specific cloud services can introduce other savings. A hosted VoIP telephone system, for example) can introduce significant call cost-savings, while cloud tools that support remote working (such as SharePoint) can decrease costs by having fewer employees based in the office.
Indirect benefits
There are also indirect cost benefits to cloud computing that are worth considering. Cloud computing means an organisation needs a smaller onsite IT estate, which in turn means less will be spent on power.
It also allows remote workers to communicate and collaborate with one another, reducing the necessity for travel as employees can connect from anywhere. That potentially means a smaller office too.
Microsoft Teams facilitates remote collaboration
Furthermore, less in-house IT results in less IT management required, meaning that your business can avoid expensive specialist hires. Outsourced IT support and services are typically 30% cheaper than one in-house resource.
Who can benefit?
While organisations of all sizes benefit from cloud and hosted services, small and mid-sized organisations typically benefit the most from the cost reductions that cloud computing bring. This is because cloud computing removes the need for substantial capital investment upfront.
Should an SME experience rapid success and growth, cloud solutions can keep pace (at Akita, we can typically expand our customer’s cloud environments in minutes if needed). Equally, services can usually be scaled back quickly if required.
Cloud computing as an investment
Adopting cloud computing isn’t just a way for an organisation to spend; it’s a way for them to invest. By investing, organisations can implement solutions that grow with their company and adapt in the future.
But moving to the cloud does not have to be an all-or-nothing process. For those concerned about handing over control of their IT to a partner (however reliable), a hybrid approach can give them the flexibility to host their data where it best suits them.
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