We’ve all heard it before: cloud computing can save you so much money! The question, though, is exactly where are these savings occurring? When businesses work with a cloud provider, they will see many existing costs transfer over, becoming the provider’s responsibility instead. While some of the savings are pretty obvious, others might surprise you. Thanks to the cloud, businesses are able to focus on developing their business while at the same time cutting major costs – it’s the basic concept of getting more for less. Let’s take a look at how the cloud can save you money:
Fully Utilized Hardware
Top-tier equipment is expensive. It’s costly to pay for the technology needed for your employees and business to work successfully. Often, businesses purchase more hardware than they need in case a failure occurs. When you switch to the cloud, you can phase out equipment that you don’t really need. Instead of purchasing all of the equipment and resources yourself, the cloud provider deals with these costs and offers the infrastructure to businesses as a service. The vendor provides you with the necessary computing resources to run your cloud solution, lowering the costs of installation, maintenance, hardware, upgrades and support. Providers also deal with redundancy so you don’t have to duplicate equipment in-house. Most cloud providers have multiple geographically-diverse data centers that mirror company data and applications so failures won’t affect your operations.
With a public cloud solution, these costs can drop even further. When you share vendor infrastructure with other organizations (which is called multi-tenancy), everyone wins. The businesses see lower costs due to shared resources, and the cloud provider optimizes hardware use.
Unique Payment Model
Most cloud providers use a pay-as-you-go model. Businesses are charged based on what they use, whether that includes the amount of storage, number of email boxes or virtual server hours – essentially, businesses rent services from the provider. This method helps businesses keep costs low by eliminating unused resources, postponing unnecessary purchases and allowing you to test solutions or programs without needing to fully commit to them.
Reduced Capital Costs
Capital costs can practically be eliminated with the cloud. There’s no need for you to invest in costly infrastructure, so you don’t see huge upfront costs. The capital investment of servers, power, software and more becomes the cloud provider’s problem. You can acquire resources quickly and easily, and the cloud provides a scalable solution to businesses. Rather than investing in resources used minimally, you can get exactly what you need, when you need it. As your business needs change, your company can increase or decrease its cloud-use accordingly. This helps keep your budget in check, while ensuring you always have what you need to operate successfully.
Businesses can purchase applications directly through the Web, getting immediate access to the programs they need. Rather than waiting weeks or months for company-wide installation, your business can see cloud software deployment occur in a matter of hours. When your employees spend less time waiting, they can spend more time working. This boosted productivity will definitely show in your profits. The upfront cost of licensing and price of constant upgrades can be eliminated, as you experience per-user costs and automatic upgrades instead. And if you’re not happy with the software, you can cancel the service. This greatly reduces the financial risk of software that doesn’t work for your business.
Decreased Power and Space
Idle equipment wastes both energy and money. Due to better hardware utilization, the need for excessive power is cut. The cloud makes it easy to consolidate servers, saving space and cutting power costs for everyone involved. Additionally, this consolidation optimizes the cooling of data centers. The decrease of power and space saves businesses money on office real estate, equipment and electricity while cloud providers create a smaller footprint on the environment. This is both a money-saving and Earth-saving benefit.
Reduced Labor Costs
As equipment and support is moved to the cloud provider, the responsibilities of managing, repairing and replacing infrastructure move too. Additionally, many services and tasks can be automated with the cloud. As these needs are eliminated on your end, you can free up your IT staff to focus on business development and strategy instead, areas which will ultimately make more money for the company. If necessary, you can even reduce your staff size. This is especially beneficial for small start-ups, as they are able to keep their workforce light by using cloud computing.
Flexibility and Mobility
The cloud allows users to access their business data and applications from any location and computing device at any time. While this creates dozens of new ways for businesses to operate, it also helps with cost savings. Your business data is not stored on physical devices or networks – instead, it’s stored virtually in the cloud, making it accessible to your users at all times. This means you don’t need to invest in the fanciest, most expensive computers for your office just to work efficiently. All you need are devices that can access the Internet – even a smartphone can do that! This mobility simplifies your needs and lowers your costs. Users are able to use devices they already own, like tablets, mobile phones or laptops, to be productive away from the office. On the more extreme side, this can save your employees the commute to work and even eliminate the need for a physical office.