Before adopting cloud-based solutions, it makes sense to evaluate the advantages and disadvantages of cloud compared to on-site options. There are numerous reasons why businesses choose cloud applications and services, from easy implementation to flexibility to reliability.
Aside from those factors, you’re probably also pondering, “Will I save money by moving to the cloud?” The answer to that question is a bit more complicated than a simple yes or no. Here’s what you should know and consider when determining how cloud solutions might affect your IT spending.
The Cloud and IT Costs: What You Need to Know
As newer, more complex technologies become mainstream and businesses undergo digital transformation to remain competitive and meet shifting consumer expectations, tech-related costs have gone up for many organizations. The 2019 Harvey Nash/KPMG CIO Survey found that more than half of technology leaders reported increases in IT budgets.
Advanced technology that saves your company money at the same time – as the cloud has been rumored to do – might seem like a dream come true. However, choosing the cloud doesn’t necessarily guarantee significant savings (or any at all).
In fact, managing cloud spend is a challenge for 84 percent of enterprises and 69 percent of small and midsize businesses (SMBs), according to the RightScale 2019 State of the Cloud Report from Flexera. There are numerous factors you must consider when assessing the impact the cloud will have on your IT costs.
Factors that Can Affect Your Finances: How to Gauge the Cloud’s Impact on Your Spending
Generally, cloud services help contain overhead technology costs. They can turn capital expenditures into monthly operational expenditures. Still, the answer to the query “Will I save money by moving to the cloud?” depends on the details of your situation.
Here are a few key elements to keep in mind that could make a big difference as far as cloud-related savings are concerned. Please keep in mind that these aren’t the only factors that can affect how cloud migration impacts IT spending.
1. The cloud provider and platform you choose. Naturally, the amount you end up spending on the cloud will vary depending on the specific solution you purchase. Be sure to shop around and compare the different options available to your company.
2. Anticipated growth. Do you expect your organization to expand significantly in the near future? If so, the easy scalability of the cloud would be more cost-effective than on-premise solutions. The same holds true if you experience seasonal fluctuations in demand.
3. What your organization spends on backup hardware for your servers and data centers. If you use on-premise data centers and servers, you also need to invest in backup infrastructure in case your primary option fails. With solutions from most major cloud suppliers, you won’t have to worry about that anymore, since they have multiple data centers and will back your data up across them, according to the Webroot article “5 Financial Benefits of Moving to the Cloud.”
4. Your cloud cost management strategy. A relatively large amount (35 percent) of cloud spend is wasted, according to the RightScale report. To maximize savings, you should implement a cloud cost management strategy, which can include the following processes:
- Monitor your spending on a regular basis so you’re aware of any changes over time.
- Identify areas of waste, such as workloads that could be automated and instance sizes that don’t fit your needs.
- Look into using cloud cost management tools, which many cloud vendors offer. For example, Microsoft Azure has Azure Cost Management features.
- Check routinely for shadow IT apps driving up your cloud costs.
Other Questions to Ask Before Cloud Migration
The impact on your IT budget is far from the only aspect you should consider when shopping for cloud-based solutions and services. Here are some other questions to ask as your business considers cloud migration:
2. Will this cloud solution truly be accessible at any time? What happens if the cloud goes down?
3. How will my provider ensure I’m getting the best performance possible out of my cloud solution(s)?
4. If you’d like more information on how to successfully migrate to the cloud, this blog series will walk you through the process step by step.
Our team of expert cloud consultants can also any questions you might have about cloud costs and cloud solutions in general. They have experience working with a wide range of cloud offerings from various suppliers in our partner network, which gives them the insight needed to act as trusted advisors to companies seeking cloud offerings that are the best fit for their unique circumstances. Call 877-599-3999 or email firstname.lastname@example.org to learn more.