The prevalence of cloud computing is continuing to grow dramatically – the Synergy Research Group reports that cloud computing revenues grew 25% across 2016. In fact, throughout last year several information technology sectors started to see the dominance of cloud technology as a delivery method for technology services. The reason for this is simple: cloud computing makes good business sense and it is often cost savings that are the major driving force.
Shared use boosts efficiency
At the core of cloud services and the costs savings it entails is the shared use of resources. Dedicating computing equipment and the physical environment surrounding it to a single user never leads to optimal usage. It is not uncommon for companies that operate their own servers to be stuck with expensive computing equipment that idles much of the time, consuming energy and occupying real estate.
In contrast, cloud computing providers are relentlessly focused on efficiency. This brings down expenses associated with hardware costs, physical space requirements and IT staff as shared resources can be managed in a manner that optimises usage. Cloud providers that operate large data centres can use sophisticated load balancing technology to achieve extremely high utilisation levels, leading to more value gained for each pound spent.
Spreading expenditure, and spending flexibly
Businesses are attracted to cloud computing services in part due to the predictability it offers when it comes to setting budgets. Both Software and Infrastructure as a Service are typically offered based on a monthly recurring costs basis so there is no need to budget for capital expenditure. This is a particularly attractive proposition for smaller businesses which can struggle to digest big capital expenditure bills.
In addition, cloud environments offer a level agility which you cannot achieve with equipment hosted on your premises. Sometimes businesses need to ramp up computing resources quite quickly or on the flipside unexpectedly find that resources that were budgeted for and acquired are simply not needed. A rapid procurement process is unlikely to lead to the best deals on hardware and software, while the inefficiency behind redundant assets needs no explaining.
An opportunity to focus
Less measurable but no less important is the manner in which embracing cloud computing allows your business to focus on its core purpose. Outsourcing non-core functions to enable better business performance in core areas has long been a management strategy, and moving technology infrastructure to the cloud is a typical example.
A more efficient and focused business is a more profitable business. Opting for cloud technology can mean saving on staffing costs, but it is often also a way to free up your tech staff to be more useful to your business. Free from the day to day management of hardware and software your IT staff can focus on improving processes and on deploying technology solutions which will benefit your business.
Getting the best value out of cloud computing
Cloud computing offers an unprecedented opportunity to keep computing needs and computing spending in tandem. Whether you are making use of cloud technology to replace typical office server equipment or as a platform for intensive computing, the way in which you manage your cloud resources impacts the value you get out of your expenditure – and the extent to which cloud computing is leading to savings.
Many business needs are relatively predictable and you should fluently communicate forecasts to staff members. Cloud computing allows you to reduce your available computing power quickly and you will get the most value for your money by immediately reducing services when they are no longer needed. Doing so consistently will require adjusted thinking and setting procedures and policies which are not typical of locally hosted IT environments.
Cost is not the only factor
It is worth keeping in mind that businesses large and small are adopting cloud solutions not just to save money. The 2016 IDG Enterprise Cloud Computing Survey suggests that business analytics and cloud storage services are projected to lead cloud computing growth in 2017. Though cost is important, it can be factors such as raw power and enhanced security and resilience that drives many decisions.
Sid Nag, Gartner research director, suggests in the Gartner Q4 2016 update on public cloud adoption that organisations are pursuing a multidimensional range of values when considering cloud implementation, including values such as agility, business growth, innovation, scalability and indeed cost savings. It is this mix of elements that will continue to power growth in cloud adoption.