Cloud computing is no longer just for the early adopters – more and more businesses are moving large parts of their computing infrastructure off their premises and into the cloud. For those who still aren’t sure, one of the sticking points is cost – at first glance, the license fees can look expensive. But if you take a deeper look, it becomes clear that moving to the cloud can actually lower your costs. Here are five ways to use the cloud to trim your costs – while also enjoying the benefits of lower risks.
1. Cloud computing eliminates the cost of servers
Server hardware is expensive to buy – and in addition to the upfront capital cost of the equipment, you’ll need to pay for installation and commissioning, including the cost of the server operating system and antivirus protection. Then there are regular updates and upgrades, which means annual maintenance contracts or an extra staff member; and the cost of securing that valuable hardware, not to mention replacing it all every three to five years. And this is before you’ve even bought any software! Using a cloud-based vs an on-premise solution eliminates all of these costs at a stroke – it all becomes the vendor’s problem. In addition, the vendor can leverage economies of scale that just aren’t available to the average business – which translates into lower costs for you.
2. Reduce your power costs
Servers need to run 24/7/365 – and they’re power-hungry, which means a server probably accounts for a significant chunk of your monthly electricity bill. In addition, all the heat they generate means you need extra air conditioning, again adding to your monthly cost. In South Africa we also have to deal with unreliable power supply, which means expensive UPS, generators and fuel. If your key systems are in the cloud, you can keep running on battery power and a wireless internet connection, even if everything else stops.
3. Working in the cloud means less downtime
Servers go down for all sorts of reasons – power fluctuations, software glitches, human error, Murphy’s Law – and when they do, it costs money. You face lost production, lost sales, delayed revenue, lower productivity and wasted labour costs. Moving from on-premise to cloud-based solutions means you never have to cope with downtime – and keeping it all running smoothly is somebody else’s problem.
4. Buy only the licenses you need
Cloud-based solutions often offer flexible license packages that make it relatively easy to scale up and down in response to seasonal spikes or downturns. With on-premise solutions, you’re constrained by the capacity of your server – and the possibility that adding a small handful of new users might require buying new hardware. Being in the cloud means you only pay for the capacity you actually use.
5. Cloud vs on-premise is more tax efficient
Servers and once-off software licenses are capital expenses, whereas cloud software subscriptions, are recurring monthly or annual operating expenses. This means adopting a cloud strategy can help you save on taxes, further lowering the cost of doing business.
When you weigh up the pros and cons of cloud-based vs on-premise software, it’s clear that the cloud is not just more secure and more reliable than on-premise solutions, it also lowers the cost of your essential business systems. If you’d like to know more about how to develop a cloud strategy for your business, get in touch!