Controlling Cloud Expenditure Part 1
Calculating the Cost Benefits of Cloud Migration
As the cloud market has gotten more crowded, increased competition has lowered costs. Now cloud services are within the reach of most companies. IDG’s 2016 Enterprise Cloud Computing Survey found that 42% of respondents said lower total cost of ownership (TCO) motivated them to invest in the cloud.
Part of what makes the cloud affordable is that its economics are structured differently than those of a physical infrastructure. Instead of frontloading the budget with capital expenses, the cloud shifts the focus to operating expenses. There’s no need to provision hardware and software. Everything is paid for with a predictable, monthly fee.
Examining features that reduce TCO and add value reveals how affordable the cloud really is. Benefits such as scalability, reliability, availability, and security reduce the cost of cloud.
The Value of Scalability
Using cloud infrastructure helps companies avoid the cost of overprovisioning their storage. Future capacity needs can be hard to estimate, so many leaders overprovision to keep from falling short. These overprovisioned resources waste space and energy, driving your budget up.
With infrastructure as a service (IaaS), your company can quickly scale down and up to match the ebb and flow of your workloads. There’s no need to keep servers running when there’s no work for them to do. The cloud provider is responsible for housing and maintaining the servers, so you save money on energy and real estate.
Your company can also build temporary environments in the cloud for the development and testing of applications. These cloud DevOps environments empower your business to generate more revenue by bringing applications to market more quickly.
Staying ‘Always on’ with the Cloud
Increasing your level of availability boosts the profitability of your business. When you achieve seamless business continuity, employees can be more productive. They can work when and where it is most convenient to them without interruption.
Availability also encourages customer loyalty. Your customers and clients trust that your business will be there to provide service whenever they need it. When consumers are happy, they refer your business to others, building your customer list.
The right cloud provider should guarantee 99.999% availability so your business can accommodate today’s always-on culture. The cloud can also reduce lost revenue by providing backup and failover for disaster recovery during an outage. The Ponemon 2016 Cost of Data Center Outages study estimated that the average cost of an outage was $740,357.
Saving Money by Staying Secure
Data breaches cost companies dearly. Stolen, compromised data robs your company of the ability to make informed decisions. After a breach, organizations become involved in expensive litigation and often must compensate affected customers. Falling victim to a hack also damages your company’s reputation, costing you future revenue.
While companies used to be concerned about cloud security, today’s organizations are gaining confidence in the cloud’s ability to protect their sensitive data. The cloud can spare your business the expense of some of the most common hacks.
The robust network provided by the public cloud can accommodate the traffic caused by a distributed denial of service (DDoS) attack that would overwhelm your on-premises network. The cloud also provides off-site backup so you can access your files during a ransomware attack and avoid paying a ransom for a decryption key.
Get Ready to Save Money with the Cloud
If your company is debating whether to migrate to the cloud, you’ll need to consider the relationship of cost to benefits. When you argue your case before the CFO, factor in the savings the cloud will provide when it prevents downtime and data breaches. These savings will positively affect your company’s bottom line.
Determining that your company is prepared to migrate will also help your case. InfoSystems can help you evaluate your resources and goals before cloud migration by conducting a Cloud Readiness Assessment.
Don’t miss the second part of our series on Controlling Cloud Expenditure.