IT departments often experience a lot of the same headaches as other corporate departments: you have to do more with less. Budgets are being cut or frozen, even as companies are growing, and you and your staff are being stretched thin and thinner trying to keep up with it all.
You can reduce a lot of your costs as well as increase profits just by switching to a cloud computing service, rather than keeping all your own hardware and server racks in-house.
According to a report by VansonBourne, 65% of organizations were expected to move more data to the cloud in 2018. VansonBourne also stated that 47% of all company data is stored in the cloud, and they expected that number to grow to 57% over the next year.
Cloud computing is also seen as a cost-cutting measure, as it reduces the amount of money you need to spend on in-house servers and staff.
Here are four ways that moving to cloud computing can reduce your IT budget.
1. Reduction in Hardware
When setting up an in-house data center, you’ll need a large, up-front capital investment to purchase your initial 5 – 10 servers. Beyond the initial capital investment, you need a lot of extra time, extra personnel, and extra fluctuating monthly costs to maintain these systems.
Moving to a cloud provider also reduces your hardware maintenance issues. It’s especially useful in the case of power outages or natural disaster. By handing the hardware maintenance over to a cloud provider, you don’t have to deal with data warehouse support. Instead, you can rely on a company whose very specialty is to ensure the power is always on, the servers are secure, and there is always a backup system for both data security as well as power. And you want a company that can quickly get servers back up and running in the case of unlikely downtime.
2. Cloud Computing Requires a Smaller Real Estate Investment
When you clear out your company’s server hardware, you’ll free up a lot of extra space. To paraphrase Marie Kondo, “hold your servers, and if they don’t spark joy, release them.” (Of course, the sparks could be signs of a bigger problem. . .)
This downsizing can also have a positive effect on your rental costs, as well as your staffing costs. If you could empty out an entire server room, you could fit more employees and their desks in that space, which could also help you avoid a costly expansion or a move to accommodate your growing employee base.
3. Smaller Resource Requirements
Company servers chew up a lot of power just to operate, in addition to the ventilation and cooling costs. And if the power ever fails, your remote employees can’t access your data. A cloud system moves that energy load off your own system and out of your company’s operations budget.
It can also help you reduce the number of IT professionals needed to manage it all. This is especially helpful as the country’s employment rate is so low, making it harder (and more expensive) to find qualified IT professionals.
Hosting and maintaining in-house hardware requires a number of experts across different part of the database system. However, when working from a cloud provider system, it’s easier to have support from a smaller staff, and those staff members can even work remotely.
In our own experience of moving clients to cloud providers, we have helped companies see a 67% decrease in IT staffing expenses.
4. Scalability to Match Business Needs
By far the biggest and best benefit of functioning on a cloud server is the scalability. Cloud providers level the playing field so that small- to medium-sized businesses and even startups have a chance to rival bigger companies that have been around for decades.
For example, let’s say an ecommerce site that runs on a conventional data center and services 10,000 customers launches a promotion. The promotion goes viral and now 100,000 customers have logged in, but there’s no way the site can scale up that much hardware quickly enough to support the increase.
But a cloud computing system would let the company update their system in minutes so they could quickly accommodate that kind of scale just before they launch their promotion or even a few minutes after they spot the explosive growth. They could resize the infrastructure to support that level of traffic and then even downsize it when the promotion ends.
This would be virtually impossible on a conventional data center because you would have to purchase extra servers to support that increase, especially for a short window of time. But a cloud computing platform lets you scale up and down based on your immediate business needs, instead of committing to a new infrastructure, going through an RFP and committee buying process, plus all that capital outlay.
If you would like to learn more about how you can switch your in-house hardware to a cloud computing setup, you can contact us to learn more.
Photo credit: Sam Johnston (Wikimedia Commons, Creative Commons 3.0)