We, at OneNeck, find that this is usually prevalent when doing an apples to oranges spend comparison and not including all of the costs of operating an IT environment (labor, infrastructure, tools, etc.). To be clear, the cloud is not the ‘cheap’ option, especially with high performance requirements. But the cost benefits compared to on-premises solution are significant.
With cloud hosting there are less (or no) capital expenses. In addition, Total Cost of Ownership (TCO) is typically lower when compared to do-it-yourself hosting and infrastructure management. How does one calculate TCO? You must use a comprehensive view of your entire infrastructure and all the services being provided by it, for it, or running on it. This includes evaluating the existing skills of the staff, existing investment in hardware, software, and facilities, as well as existing laws and regulatory pressures. The end goal of a TCO analysis is to determine which option, on-premises or in the cloud is the more cost effective business decision. However, nowadays, moving to the cloud has become a question of value, not just cost.
The Value add of Cloud
The true value of cloud computing may best be described as its ability to deliver benefits on two very different levels: both on a targeted basis (for example, through cost savings and improvements to IT) and on a broad, companywide scale in which IT can react much faster and more effectively to changes in the business.
Beyond its flexible cost structure, cloud computing can provide:
Anywhere Secure Accessibility
Cloud offerings can provide anywhere secure accessibility by delivering secure remote access to the cloud applications and resources. By enabling access from managed (corporate PC) and unmanaged (kiosk or home) PCs and mobile devices, companies improve employee and partner productivity. Secure access gateways integrate intelligent access policy enforcement with a variety of connectivity options including SSL, VPN, and Direct Access with encryption. The gateways improve the security of remote access scenarios by enforcing granular access controls and policies that are tailored to the cloud applications being published, the identity of the remote user and the health status of the device being used to access the cloud. For example, the access gateway policies may verify the virus control or patch status of the access device and deny or limit access based on the results. The secure gateway solutions may interact with the enterprise authentication directory, minimizing account management effort and enabling a variety of strong authentication methods.
Staffing Costs and Skills Reduction
Cloud computing can significantly reduce staffing required to support IT. With cloud computing, companies no longer have the staffing and skills requirement to set up, configure and maintain the technology as well as the supporting infrastructure. Cloud computing also provides access to skills and capabilities without having to train internally. This can be a major benefit for smaller organizations and startups that are typically scarce in resources and skills.
One of the most challenging and costly aspects of managing an IT environment is capacity management and planning. To meet business demand, organizations typically over-engineer systems and provide more computing ability and network resources than required. With cloud computing, IT departments that anticipate an enormous increase in business demand need not scramble to secure additional hardware and software. Instead, an organization can add and subtract capacity as its demand dictates.
As noted above, cloud computing has numerous benefits. The key to successfully leveraging cloud computing is to address impressing issues and keep your expectations in check. Companies must be realistic about what cloud computing can deliver in terms of ROI, cost reductions, revenue increases and other promises. Making use of cloud computing correctly and efficiently can help businesses be successful, innovative, and in step with their competition.
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