Real Cost Savings in Cloud Computing
Home » Blog » Where is the real cost savings in cloud computing?

Where is the real cost savings in cloud computing?

Cloud computing has gained incredible popularity among SOHO (small office/ home office owners) and SMBs (small and medium-sized businesses) particularly due to its cost-saving potential. In fact, organizations of every size, type, and industry are switching to cloud computing to achieve cost-effective ways to boost speed and efficiency.

If you’re looking to enhance availability, accessibility, and scalability of workflows, cloud computing is an ideal solution for you. Let’s dig deeper into what cloud computing is all about:

Unlock the future of intelligent applications with our cutting-edge Generative AI integration services!

What is Cloud Computing?

Cloud computing refers to the on-demand supply of IT resources on the internet that are available at pay-as-you-go pricing.

Instead of establishing and maintaining an in-house IT infrastructure, including physical data centers and servers, you obtain access to efficient technology services, such as computing power, databases and storage from a cloud service provider like AWS (Amazon Web Services).

As of now, organizations, particularly growing businesses, are using cloud computing for data backup, email, software development and testing, customer-facing web applications, disaster recovery, virtual desktops, and big data analytics.

For instance, financial institutions are leveraging cloud technology to implement real-time fraud tracking and prevention. Likewise, healthcare organizations are using the cloud to set up more personalized treatments for patients. Thanks to cloud-based video games, millions of gaming enthusiasts from around the world are now able to play their favorite games online.

Now that we have discussed what cloud computing is, let’s find out where the savings originates:

How Cloud Computing Leads to Cost-Savings

Requires No Setup Investments

As opposed to setting up your own IT infrastructure, getting started with the cloud is remarkably cheaper. Running and managing your own servers also means you may come across unanticipated expenditures associated with the management and maintenance of the system.

Since all your infrastructure needs are fulfilled by the cloud service provider for a fixed cost, no upfront investments are involved. Plus, cloud computing is like another utility service. The cloud provider takes care of all the maintenance and you get everything you need at any point in time for nominal costs.

Optimal Hardware Utilization

Cloud server providers optimize the hardware needs of their data centers, resulting in economies of scale. When you switch to the cloud-based model, the server infrastructure of the cloud provider is shared between your workload and the computing needs of other clients.

Depending on the workload, this will ensure the full utilization of hardware sources. Higher efficiencies resulting from economies of scale mean lower costs to the cloud provider, who will in turn reduce costs.

Energy Savings

The power consumption associated with an in-house IT structure can be outrageously high, especially when servers run 24/7. Again, this brings us back to the utilization of IT resources. Running an in-house IT system means you may not be utilizing the servers optimally while the energy consumption will keep on increasing.

On the other hand, cloud computing is extraordinarily efficient and consumes less power. Optimum server utilization leads to efficient power usage. With energy cost savings, your cloud provider charges you considerably less for the systems used.

service disabled veteran owned small business


No In-House Team

If you’ve been managing an IT system on your own, you must be aware of how costly an indoor IT team can prove to be. Wages and salaries for IT personnel tend to be high due to the nature of the roles. High pay scales in the industry are also attributed to shortage of talent. Plus, let’s not forget the costs and hassles associated with hiring and accommodating the team.

With cloud computing, you no longer need to worry about hosting a team to deliver your computing and IT needs. When you don’t have an in-house team, you don’t need to worry about the compensation costs for the staff as well as the benefits. You also don’t need to consider associated expenditures, such as rent for the office space. Moreover, you  don’t have to worry about how things will work if an important staff member temporarily leaves.

If you already have IT personnel, have them work on other business areas, such as app development, that have the maximum potentials for cost savings.

Eliminates Redundancies

Redundancies are a massive problem for in-house IT management. When it comes to managing your systems, you can’t rely on a single hardware to keep things running. There has to be an alternative hardware to keep things up and running if the system crash or fails.

Purchasing additional hardware adds to your overall costs. Plus, they require regular maintenance whether you use them or not. Incurring maintenance costs for hardware without any purpose sounds unnecessary.

An inexpensive way to deal with your redundancy requirements is to move to the cloud. Cloud service providers typically rely on multiple data centers and ensure resiliency by replicating your data. Should there be a disaster like a flood, fire, or a system crash, your system will start running again in no time with cloud computing.

Small Disadvantaged Business

Small Disadvantaged Business

Small Disadvantaged Business (SDB) provides access to specialized skills and capabilities contributing to improved competitiveness and efficiency.

Conclusion for Cost Savings in Cloud Computing

Cloud Computing enables you to trade capital costs, such as those associated with physical servers and data centers, for variable expenses. You’re only required to pay when you consume the services. Now that you’re aware of where the savings originates, it’s time to make that crucial change and be innovative. With so many options out there, choosing a cloud service provider can be a daunting task.

Further blogs within this Cloud Solutions to Enhance your Bottom Line category.