The Game Changing Cost Benefits of Cloud Computing

The U.S. cloud economy has almost tripled since the mid 2000s. Many companies today have shifted from on-premise IT infrastructure to cloud computing technology. This change has provided organizations with increased flexibility, scalability, and cost benefits. Indeed, newer companies that use cloud computing are more productive and more likely to thrive than those with traditional IT infrastructure. On a macro level, the shift to cloud computing has supported millions of jobs in the U.S. and contributed billions to the GDP. 

On a smaller scale, cloud computing has offered many individual businesses a multitude of financial benefits. Although initially extremely expensive, the expansion of AWS and market competition with the advent of newer cloud providers caused the cost of cloud computing to sharply decline after 2010. It is now much more affordable and easier to leverage cloud computing technology for your business. In this article, we discuss five ways in which cloud computing can enable game-changing cost benefits for your business. 

So let’s start off with the obvious. What is cloud computing and why could it provide real and measurable benefits to your business? Cloud computing involves using large data centers hosted by Amazon, Microsoft, Google, or another cloud provider, which enables you to leverage economies of scale. Rather than spending hundreds of thousands of dollars on maintaining an expensive IT infrastructure on-premise, you can instead utilize cloud service providers to virtually run infrastructure and scale it up as needed. These services allow you to host databases, applications, webapps, and more easily and affordably—while avoiding paying for unneeded IT infrastructure. 

In many cases simply lifting and shifting your cloud architecture to AWS can result in small cost increases. However, over time as you convert your software to be cloud native, you will be met with an enormous number of opportunities for cost-optimizations. These can drive down costs massively while also enhancing the performance of your environment.

With Cloud Computing, You Pay As You Go 

There are lower upfront costs with cloud computing than with traditional IT services. Cloud computing has a “pay for what you use” approach. You will pay for as much (or as little) as your system use requires. With traditional IT services, you’re more locked into higher upfront costs and administrative IT expenses. As far as the cost benefits of cloud computing go, this is a big one. 

There are also lower continuous operating costs with cloud computing. With cloud computing, you not only pay as you go, but you also scale as needed. You only pay for what you use—and you can scale as much or as little as needed, depending on your business’s needs. Your cash flow will better align with your actual operating and systems cost. 

Since cloud computing enables you to only pay for what you use, you save money in the long term. This allows you to scale naturally, in alignment with your evolving business endeavors and customer needs. Rather than maintaining and paying for your own server—regardless of customer and business demands—you’ll reduce your overall operating costs through the highly scalable nature of cloud computing.

Cloud Computing Lowers Your Maintenance Costs

Cloud computing enables your IT people to focus on other aspects of running your business instead of maintaining your own server farm. Naturally, there’s less hardware to maintain after migrating to the cloud. Your IT department won’t need to spend their valuable time and skills on maintaining servers, working out network issues, and managing storage. Instead, they will be free to focus on supporting and expanding existing infrastructure. 

You’ll save a bit of money on energy costs each year, too, as cloud computing by nature requires less electricity to operate. Servers expend energy—and money—that you don’t need to be spending if they’re idle or you’re not utilizing them to their full extent. It’s likely that if you have a traditional IT infrastructure right now, not all of your servers are being completely utilized. Cloud computing enables you to spend less money for the same level of operations. It also allows your company to be more environmentally friendly, which can be especially important if there are customers who want to spend their time and money with companies that prioritize reducing their environmental impact.

Cost Benefits of Cloud Computing Through ‘Resource Pooling

Resource pooling is defined as a cloud’s ability to provide service to many customers with a multi-faceted model that utilizes different resources according to customers’ needs and demands. It is a critical feature of cloud computing, according to NIST. Resource pooling is a large part of what enables cloud computing to streamline your workflow and decrease overall costs. Cloud computing enables substantial financial benefits through resource pooling. 

Cloud computing enhances the efficiency of your entire infrastructure, as some environments can centrally pool all of your resources to distribute to your applications based on the need. In many cases the upfront costs of switching to cloud computing are substantially mitigated by savings, even within the first year due to the lack of server infrastructure. Instead, cloud computing reduces your business’s physical resources and allows you to spend less time and money maintaining your servers.

Redundancy is Another Critical Cost Benefit of Cloud Computing

Many people might not see redundancy as a cost benefit of cloud computing, but it absolutely is. Most cloud providers have data centers around the country, allowing for the possibility of failovers. For instance, if one datacenter has a power outage or natural disaster, in many cases, infrastructure and servers in a geographically disparate data center pick up the load, leading to minimal downtime. As far as the cost benefits of cloud computing go, this is a no brainer. Extended outages can cost companies hundreds of thousands—or even millions—of dollars while damaging their reputation in the marketplace. Redundancy is a key feature to consider when switching to cloud computing

The Cost benefits of Enhanced Security and Privacy

Another cost benefit that many companies don’t consider is the enhanced security that can come with building a high-performance and well-optimized cloud environment. First, you save enormous amounts of money by not having to worry about the physical security of your IT infrastructure. In addition, many free and paid security tools are available through AWS and third parties which can enable you to further. In addition some cloud providers such as AWS offer GOVCLOUD which can make meeting a range of federal requirements (such as FEDRAMP) far easier.

To sum up, there are many cost benefits of cloud computing. Among the benefits are only paying for what you use, lowering your maintenance costs, and resource pooling. With cloud computing, you can save money, provide flexibility in decision making, and enable greater scalability for your business. However, every business is different and may see a variety of other benefits from cloud computing. If you have any questions about how your business can leverage cloud computing for long-term financial benefits, contact us today for a free consultation. 

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