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How To Spend Less and Make More

Businesses always want to save money.

Their core purpose also tends to be to make money.

What if you could do both at the same time?

It almost sounds too good to be true – but then we think about the cloud.

Cloud resources have increasingly helped businesses meet their demands and take advantage of new opportunities, all the while saving significant amounts of money thanks to inherent efficiencies. In a cloud environment, businesses are able to work more efficiently and productively. That’s because the cloud makes businesses smarter. It forces them to evaluate what their core competencies and differentiators are, and which areas might benefit from management, automation or elimination.

Saving Money

Reduced cost is a cloud benefit we hear over and over again. But do you know exactly where the savings are occurring? Let’s take a look:

Pay As You Go

This is the typical payment model for cloud services. Organizations pay based on the amount of resources they use, whether it’s the number of mailboxes per month, amount of storage used, or the virtual machines and power required. In other words, businesses can essentially “rent” cloud services, which helps eliminate the costs of any unused resources.

CapEx to OpEx

Capital expenditure is just a headache. Fortunately, cloud requires fewer purchases on the business side, which means less money flowing in and out. Many costs shift to operational expenditure, and overall, an organization experiences easier management of what little inventory it does require.

IT Labor

This is kind of an obvious point, as cloud services are essentially IT resources delivered as a service. But think about it. In a cloud environment, IT responsibilities either shift to the cloud provider, or become more manageable and efficient in-house. And some tasks can even be automated, freeing up your IT staff to work on strategic business projects and delivering on your core competency.

Time to Value

Put really simply, cloud computing just speeds everything up. Remember how long it would take to complete a hardware refresh, set up new software, or add new users to your environment? With planning, purchasing and installation, you could end up with months wasted. Cloud resources, on the other hand, can be ready to go in hours. Not only does that save your IT department a lot of time, but it gets your users up and running with the new services almost immediately, resulting in massive productivity gains. Additionally, the scalability of the cloud ensures that a business can boost its resources during periods of high demand, rather than investing in an entirely new infrastructure.

Space and Energy

Overall, cloud computing leaves a smaller data center footprint, as resources and infrastructure are consolidated. First, by moving to virtual machines, you’ll save physical space. But second, you’ll cut your energy use significantly, avoiding powering all those physical servers that are constantly throwing out heat and eating up power.

Making Money

save money in the cloudOkay – so now you know how a business can save money in the cloud. But where does the “making money” part come into play? Check out these examples from IBM:

An engineering firm wanted to speed up its work. It typically took two weeks to run simulations for a project, using in-house installed servers. This was a long period of time that simply wasn’t helping the organization meet demands – but buying additional resources and processing power would be a huge investment. So the engineering firm decided to move its simulations to a cloud environment. In the cloud, the firm could access 10x the power it ever had in-house, and it could access it when it needed it, rather than making a long-term investment. The business pays only for the processing time and power it users, and has been able to reduce the time required for these simulations from two weeks to two days! This means services are delivered much faster to clients, and the business experiences a boost in revenue.

The next company usually experienced a three-year refresh cycle for its desktop machines. Making this new equipment investment every three years added up, so one year the company decided not to. Instead, it built a cloud environment and moved its data and applications over. Rather than residing on the individual machines, these resources resided in the cloud. This helps the organization get more life from its machines, reduces the necessary refresh cycle, and delivers better performance. This also ultimately leads to annual savings, which the business can now invest in capitalizing on its core strengths and better delivering products and services to clients.

Ric Telford of IBM said it perfectly: “So you have an IT staff of 20 to 30 people, and half the time they’re tied up in rebooting servers and backing up disks and diagnosing failures and applying patches to software. What if they didn’t have to do that any more? Now you suddenly have 10 people freed up to redesign your website, to develop an analytics engine, to do predictive analysis of sales, to create a website for a new marketing campaign. That’s what cloud’s really about…It’s taking the previous dollars you spent on having IT staff and making sure you get those folks working on the things that are most differentiating to your company.”

More simply stated: cloud computing allows you to save money money and resources while making money and focusing on running a business. As long as you know what gives you a unique advantage as a business, moving to the cloud will help you achieve the savings you desire and enhance your operations. 

Want to learn more? We’ve got two free courses that tie perfectly into this topic. Start them below!

Driving Business Growth in the Cloud

Financial Benefits of Cloud Computing

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