Cloud – where are the benefits?

By Chris Cowdry | 11 March 2015

When it comes to migrating to cloud, organisations ultimately ask three key questions; will it save money, will it enable greater efficiency, and is it safe? The latter question regarding data security has been answered many times over. Initial resistance to cloud due to security concerns has been overcome and adoption is on the rise. Gartner predicts that cloud will form the bulk of IT budgets by 2016 and by 2017 nearly 50% of organisations will be using hybrid cloud.

In answering the questions on cost-effectiveness and efficiency, it is important to note that cloud is an all-encompassing concept that ultimately means different things to different people. As a result, realising the true benefits of any cloud deployment largely depends on matching the requirements of the organisation to the type of services that cloud offers.

There is no doubt that cloud has changed the way in which IT services are delivered and consumed, but how then does a business reap the benefits of cloud? Ultimately it is about defining an organisation’s requirements and ensuring that the cloud service is, in fact, fit for purpose and the best way of meeting these needs.

Does cloud save money?

The short answer is yes, it does save an organisation money. The most savings will likely be for those businesses moving to a virtualised environment from an IT estate that features un-virtualised infrastructure. Cloud is underpinned by virtualisation, and as a result, greater efficiencies can be achieved through the consolidation of computing, network and storage resources.

One of the main reasons for adopting cloud is the move from using a capex model to an opex model. The obvious benefit is that expensive infrastructure equipment doesn’t need to be bought or replaced when moving to cloud; and as organisations essentially pay for the services they consume, the costs fall under the opex budget. It is important, however, that businesses understand all the costs involved in a cloud migration, including total cost of ownership and capacity analysis to map out the anticipated efficiencies and cost savings.

Hosting data in a virtual environment also ensures that an organisation can scale up (or down) as is required with no additional significant investment. Compared to on-premise hosting where physical servers and other equipment must be installed in order to meet growth requirements, cloud is extremely cost-effective in this regard. In addition, migration to the cloud and making use of a third party hosting organisation effectively frees up in-house IT staff. In this way, the IT department can focus on the nuts and bolts of operations and not on maintaining infrastructure. While existing IT resources can be used more effectively, making use of virtualised hosting also ensures that no specialist IT skills are required. Recruiting and retaining IT staff with the requisite skills is often a challenge for organisations, especially small and medium sized operations where budgets are not as large as corporates. In the same way, smaller enterprises are able to take advantage of the same benefits that are afforded to larger operations because cloud can be scaled according to size while offering the same advantages, with the same service level agreements in place.

Does cloud boost efficiency?

When hosting data on-site, there is a requirement for electricity to run the servers and equipment, as well as air conditioning to maintain the environment around the technology. Moving to the cloud negates the need for the equipment and also eliminates the power requirement. In addition to the obvious cost saving, operations also become more efficient as the cloud services provider is now responsible for those requirements. The cloud provider or data centre operator can pass on additional savings to customers due to the economies of scale, as well as the focus they often have on energy and environmental efficiency.

While IT staff within an organisation can better use their resources, so too can management of an operation; outsourced cloud often means that they are able to focus on strategic issues, customers and business outcomes.

However, one of the key features of cloud is that almost anything – data or business system – can be deployed in the cloud, from CRM systems and accounting packages, to contact centre platforms and telephony solutions. The opportunities for inter-office collaboration also increase when documentation and data is stored on the cloud. Mobile workers, staff in other locations and consultants, for example, can take advantage of collaboration benefits merely by being connected to the company network.

In addition, the options for disaster recovery and backup are made more efficient and cost-effective as they can be outsourced to the cloud services provider who has both the expertise and technology to deliver the right solution.

Conclusion

While it is clear that cloud is not necessarily the solution for every single business or the answer to every question regarding saving money or improving operational efficiency, there is no denying that it presents a smarter way to do business. By identifying your business requirements and the outcomes you wish to realise by moving to cloud, the advantages and suitability of cloud services will become clear.

 

By Chris Cowdry, solutions architect, Pulsant

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