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4 Financial Benefits of Cloud Infrastructure

By Jodie Korber on 16/06/16 10:30 AM

Topics: Cloud

Cloud infrastructure known as Infrastructure as a Service (IaaS) offers businesses remote access to IT resources such as servers, CPUs, storage devices and other hardware and networking equipment.  IaaS can be used to run a single application or your entire organisations IT infrastructure, this is alternative to purchasing your own infrastructure. Here are the top 4 financial benefits of cloud infrastructure.


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1. No Up-Front capital Expense

When purchasing your own hardware infrastructure, you have to estimate how much capacity you will need over the next 3 - 7 years, and most of the time you will have to pay for it all at once. This ties up a large sum of money that you could be spending on other things. Not only is it difficult to accurately estimate your usage over such a long period of time, it is not an effective use of your money.

Since global public cloud providers invest and operate at such high scale, they pay a lot less per unit than anybody else. They run their business on a high volume, low margin basis which allows them to pass signifcant savings along to you.

2. Reduced Operating Costs with Cloud Computing

Quite often, the costs of maintaining your own infrastructure are overlooked or underestimated. These costs include:

  • Power

  • Cooling

  • Data centre rental (if offsite)

  • Hardware maintenance contracts

  • Procurement costs and delays

These operating costs are included in the rental of your cloud infrastructure.

3. Pay Only for What You Use

Infrastructure from cloud technology providers can be made available in minutes and you only pay for what you use. This model allows your investment on IT to align much closer to the financial performance of your business over time.

Academics use a term called option value for which a premium is paid for flexibility. In the unlikely event that a cloud alternative may be more expensive than purchasing infrastructure for the same duration, this would be understandable, as there is no implied commitment beyond the duration.

4. Minimise Employee / Customer Dissatisfaction

Your organisation has a greater dependency on IT infrastructure than ever before. It supports your internal customers (employees) and your external customers (through your web presence). Patience for infrastructure availability is growing thin. This makes capacity planning and management very difficult. If you purchase too much infrastructure, you are wasting money. If you don't purchase enough infrastructure, your employees and customers become frustrated and dissatisfied. This is an additional cost to your business.

Overall

You should consider the key drivers and goals for your business since migrating to cloud technology isn't an all or none proposition. You can run your line of business applications on premise, while hosting others in the cloud, avoiding upfront server costs and benefiting from fast, easy scalability and simplified management.

 

Learn more about Cloud Computing with our easy to read 5 page Cloud 101 Guide!

 Cloud 101 Guide

 

You might also like this related article, Get ready for the cloud, and avoid a storm of problems