Will Cloud Computing really reduce your budget?

5th Oct 2016

There is very little in the way of published information (or studies) available regarding the cost effectiveness of cloud computing over traditional networking for businesses. As a result, the debate over whether a cloud computing framework is financially viable still rages on. With no formal scientific studies to refer to, it's very difficult for those that are pro cloud computing to build a rock solid argument (and very easy for skeptics to deface what evidence is present).

The truth is that cloud computing is most definitely cheaper for most applications or businesses, but perhaps not all of them. There are many different factors to consider when looking at the cost effectiveness of Cloud Computing vs. a grid based network. The most notable include:

Hardware costs
Licensing fees for software usage
Storage concerns / requirements
Administrative costs
Maintenance
Backup costs
Power usage considerations
Software assimilation

The cost of having to constantly upgrade hardware and software alone is enough to drive businesses away from traditional grids and headlong into Cloud Computing. And more software developers are catching up to the idea of releasing cloud-based software packages (that will allow businesses to greatly cut their overall expenses related to software licensing). However the biggest financial benefit of switching over to a cloud network is still hardware-related. Where traditional grid networks require that not only servers and control hardware be replaced on a semi-annual basis, cloud computing is able to effectively recycle old servers and hardware stacks for other uses within the network itself. This essentially means that fewer overall upgrades are necessary over a 10 year period which is even more incredible when you consider that there's no danger in terms of 'loss of performance capabilities'.

Cloud computing is also more flexible and efficient with its storage capabilities as well. In a traditional system there if often very large segments of data (storage space) that is virtually unused; this unused space must also be maintained and paid for. With cloud computing, an entire network shares storage space, which makes it easier to predict actual storage requirements from year to year and more efficiently manage the storage space that's there already.

Another area where cloud computing excels is in its back-up abilities. A traditional grid network requires a lot of effort and man hours to effectively back-up; not to mention additional hardware costs. This translates into large amounts of capital that must be spent just to ensure that a network and its data is secure in the even of an emergency. This is a non-issue in Cloud Computing. A typical Cloud Computing network will be set up to perform daily back-ups of an entire network of servers compromising every scrap of information (including user information, settings and preferences) contained therein. The data is stored off-site in a secure location. This process is usually automated and requires only a fraction of the personnel required to do the same thing on a traditional network. Then there's the issue of maintenance; in a traditional network (operating within a large corporation, for example) there is a need to employ a significant number of IT specialists just to keep the system up and running. Once again, cloud computing is head and shoulders above in this regard as well; because a large cloud can be effectively managed by a much smaller team of specialists.

Cloud-based networks also tend to use less energy than their grid-based counterparts. This is due to the fact that there is less actual hardware present and more virtualization occurring.

One of the unforeseen benefits of cloud computing is its ability to provide management and accounting with solid data that they can use to prepare better fiscal budgets. Today's companies spend significant portions of their budgets on tech-related expenses because they are completely reliant on the abilities of these systems to help them run their enterprise. Cloud computing is not only cheaper to run and manage than a traditional network (in a number of different ways), it also gives businesses the power to do more than ever before.

To learn more about the management aspects of Cloud Computing (including Financial Management), check out our Cloud Computing Certification Pathway