Financial Benefits of Moving to Cloud

                                                                                                 image courtesy of betanews.com

There are many benefits that cloud technology can offer a business, however, business doesn’t buy technology for technology’s sake, it buys it for positive business outcomes. The two most popular business outcomes desired by most businesses are to increase revenue and reduce cost. Information Technology (IT) has long been known to be one of the costliest departments in a business. So it makes sense, if we’re going to recommend to a cloud solution, we look at the financial benefits. The financial advantages paired with the expertise in determining what applications should migrate to the cloud create a cloud strategy. This consultation is not completed just once but needs to be completed periodically by a strategic partner like Two Ears One Mouth.   Just as telecommunications and internet circuits can get financially burdensome as a business grows, so can a cloud solution. Telecom cost recovery became a financial necessity for businesses when telecom costs spiraled out of control. A consultant would examine all the vendors and circuits to help the business reduce IT spend by eliminating waste. The cloud user faces a similar problem, as cloud services can automatically grow as demand increases. The growth will include the cloud solutions cost as well as the resources.

To follow are the three primary financial benefits of a cloud migration.

CapEx vs OpEx

The primary financial benefit most organizations plan for with their first cloud implementation is the benefit of an operational expense (OpEx) instead of a capital expense (CapEx). This is particularly beneficial for startup companies and organizations that are financially constrained. They find comfort from the “pay as you go model” similar to other services they need, such as utilities. Conversely, enterprises that invest in equipping their own data centers have racks of equipment that depreciate quickly and utilize a fraction of the potential purchased. It has been estimated that most enterprises have an IT hardware utilization rate of about 20% of its total capacity. Cloud services allow you pay only for what you use and seldom pay for resources sitting idle.

Agility and scale

Regardless of the size of your business, it would be financially impractical to build an IT infrastructure that could scale as quickly as the one you rent from a cloud provider. This agility allows businesses to react quickly to IT resource needs while simultaneously reducing cost.  Many cloud solutions can predict when additional resources are needed and are able to scale the solution appropriately. This provides obvious benefits for the IT Manager but can create problems with the IT budget. If the cloud solution continues to scale upward, and it is billed transitionally, the cost can escalate quickly. Cloud instances need to be monitored constantly for growth and cost. For this reason, Two Ears One Mouth consultants have developed a product known as cloud billing and support services (CBASS). CBASS makes sure the benefits originally realized with the cloud migration remain intact.

Mitigate risk

Many best practices in setting up a cloud infrastructure also enhance IT security. For instance, because your data resides elsewhere, cloud users tend to implement data encryption.  This encryption can include not only the data that rests in the cloud providers datacenter but also as it’s in transit between the datacenter and the customer. This is a wise practice for IT security. It can eliminate data breaches and benefit regulatory compliance in some cases. Additionally, security software and hardware, such as a firewall, tend to be superior in larger IT datacenters, such as with a cloud provider. Ironically, IT security which started as a concern of cloud computing, has become an advantage.

Cloud technology has long been a proven technology and is here to stay. It has reduced IT budgets while enhancing IT response time. However, the cost savings of cloud is not automatic and ongoing. Savings, as well as the solution, need to be measured and affirmed regularly. consultants can monitor your cloud environment leaving you to focus on the business.

If you need assistance with your current IT cloud project  please contact us at:

Jim Conwell (513) 227-4131      jim.conwell@outlook.com      www.twoearsonemouth.net