How the cloud really can save you money

There’s an old saying in business that you have to spend money to make money.  Although there’s a lot of truth in it, there are some exceptions to every rule.  For example, when you move to the cloud, you actually save money on capital expenses.  Then you only pay for what you actually use.  This can really trim back your operating costs.  What’s more, one of the many benefits of the cloud is its many possibilities for indirect cost savings.

Moving to the cloud eliminates the need for capital expenditure.

Cash flow is king in business.  This is particularly true of SMEs.  Large expenses can really hurt a company’s cash flow.  They mean businesses either have to set aside a chunk of their income or use financing.  The former means they can’t use that money for something else.  The latter carries financing costs.  For finance departments, this in itself is probably a justification for moving to the cloud.

With cloud platforms you only pay for what you actually use.

When you run your own data centers, you have to allow spare capacity.  This is just a fact of life.  It’s way too complicated (and hence risky) to start swapping hardware in and out to cope with changes in demand.  From a financial perspective, there are two big problems with this.  One is probably fairly obvious and the other one less so.

The obvious problem is the one mentioned above.  The less obvious problem is that leaving computers “idling” until they are needed generates further costs.  Even though the power requirements may be minimal, these minimal costs add up.  In fact, over time, they can build up into substantial costs.

With cloud computing, your cloud vendor takes care of everything.

Right now there is a major shortage of skilled IT staff.  There is a particular shortage of staff with IT-security skills.  This can be a major headache for all businesses.  It can be particularly challenging for SMEs.  SMEs are likely to lack the budget to offer IT professionals the sort of salaries they can command with larger organizations. 

They are also likely to be limited as to the opportunities they can offer for professional development.  This can actually be an even bigger issue than salary.  IT is a very fast-moving profession.  IT-security is probably the fastest-moving part of IT.  In other words, people who get left behind can really struggle to catch up.

All of this means that SMEs can really struggle to recruit IT staff in the first place.  They then have to find a way to retain them.  Otherwise, they face dealing with a revolving-door of staff arrivals and departures.  These can quickly become very expensive.

They can also lead to important issues “slipping through cracks”.  For example if your run on-premise infrastructure, you need to manage upgrades, patches and licenses.  Mistakes here can lead to downtime and, potentially, to legal action.  When you move to a cloud environment, your cloud vendor takes care of all that for you.

Cloud adoption can save your real estate bills

Running on-premise infrastructure basically means that you have to hand over valuable office real estate to IT hardware.  Adopting the cloud can make it possible for you to put this space to much more cost-effective use.  In fact, it may even allow you to shrink the size of your office.  This could allow you to save money on rent.  If you own your building, it could make it possible for you to sub-let part of it.  Either way, you benefit financially.

Cloud platforms are made for flexible working

The cloud environment is both scalable and, in principle, accessible from anywhere.  Obviously, most companies will probably want to add some level of security to their cloud access.  The key point to note, however, is that it facilitates remote working in all its forms.

As a minimum, companies can take advantage of this in their disaster-recovery planning. Your preference may be to have all staff in the office at all (working) times.  In reality, however, you will still have to plan for the possibility that you will lose access to your office.  Even if this loss is only for a short time, it can still hurt.  For example, it could happen during a peak period when you really need everyone to be working flat out.

These days, however, companies are increasingly using cloud computing as part of their strategy to recruit and retain staff.  First of all, you can allow your existing staff some flexibility to work remotely.  This can make it a lot easier for them to manage their work/life balance.  Not only is this ethical, it also makes good business sense.  For example, it gets around the problem of staff coming into work when they are “just a bit sick”.  This gets their work done, but spreads the bugs around the whole office.

It can also be used to get around local skill shortages.  If staff can work from anywhere, then you can hire from anywhere.