Let’s look at some numbers first. Resend data indicates that in 2020, the combined end-user spending on cloud services totaled $270 billion. In 2021, this is expected to increase by 23.1 percent to a staggering $332.3 billion. Moving forward by just a year, projections indicate that this figure will rise to $397.5 billion. When it comes to total market size, in 2020, the total worth of the cloud market was $371.4 billion. With a compound annual growth rate (CAGR) of 17.5 percent, it’s projected that the market will amount to $832.1 billion by 2025. If we look at workloads, cloud data centers are expected to process 94 percent of all workloads in 2021 — with SaaS processes accounting for 75 percent of the total workload. For more information on managing SaaS workloads, please refer Cloud Direct Connect.
If it wasn’t clear already, cloud computing is here to stay and the best thing to do for businesses currently is to look at where they can drive competitive advantage based on cloud technology. One of the best benefits of cloud technology comes from the fact that they can save businesses a boat load of money when it comes to cost savings. In this article, we will look at the various different ways in which cloud technology enables businesses to save money.
What is Cloud Computing?
To put it very simply, cloud computing refers to the delivery of different services through the Internet. The services can include anything from tools and applications like data storage, servers, databases, networking, and software. Cloud storage often acts as a full proof back up of sensitive data thanks to its ability for remote storage. With software and hardware both making extensive use of the cloud, all that enterprises need now is stable network connectivity as nearly the entirety of the operational infrastructure can be accessed via the cloud. This has proved a great boom for businesses especially with remote work taking center stage in the wake of the pandemic. Cloud technology has enabled businesses to connect employees and clients the world over with service delivery going as planned thanks to cloud connectivity. It is also an increasingly popular option for businesses due to significant cost savings, improved productivity, speed, efficiency, performance, and security.
8 Effective Ways Cloud Computing Saves Your Business Money
Less Hardware
Operational environments that have embraced the Cloud can effectively run on much lower hardware deployments and associated costs. Companies no longer need to invest in deploying and maintaining server rooms and large-scale desktop deployments to run their networks. This also enables them to save on Office space requirements that can also be quite expensive. With the cloud, hardware-related expenses are extensively minimized, if not eliminated. No longer need to worry about running or maintaining expensive equipment as the minimal maintenance can be handed over to a small team of dedicated internal staff or managed service providers. In case something goes wrong, it is the responsibility of the vendors to take care of any equipment replacement or repair. Needless to say, this also minimizes the cost of running the entire gamut of hardware infrastructure yourself.
Save on Software
Businesses can also save on iterative investments in software as all departments can access all the relevant software programs and databases via the cloud. This cuts down on the necessity to have multiple copies of costly software ‘hard copies’ on hand and your cloud provider takes care of upgrades and patches automatically. In case you run into problems or have doubts, most cloud services offer 24/7 support, leading to less downtimes.
Vendors have your IT human resources cover
Having a good team of IT professionals on board can be expensive to maintain in the long term. Unfortunately, you do need best in class IT services in order to keep your operations and services running smoothly. In the current environment of severe talent crunch, managed service providers make it easy for businesses to access some of the best engineers and consultants in the IT industry on demand and at predictable rates.
Pay for what you need
Maintaining your own infrastructure can often run up redundant costs that can be hard to spot and get rid of. With cloud infrastructure, businesses can simply pay for what they actually use including everything from storage, email boxes, virtual server hours to tools and applications. This can be particularly helpful for emerging businesses as they can keep costs low by eliminating waste, redundancies and unused resources. This also enables them to keep a bird’s eye view on all their hardware and software investments, postpone unnecessary purchases and even test out new solutions or programs as they emerge without fully committing to them. Cloud cost management can help you significantly cut down on infrastructure costs.
Lower Energy Costs
Energy costs associated with running internal servers can be prohibitively expensive. Using hosted solutions often hopes companies minimize their energy footprint as the host bears the costs related to server management. This enables savings through shared services or economies of scale.
Lower initial capital investment
One of the most important Advantages of Cloud Computing is its ability to nearly eradicate capital costs traditionally associated with running a business. Upfront investments are eliminated as the capital investment traditionally reserved for servers, power, software and more is borne out by the cloud provider. This enables companies to acquire resources and scale on-demand quickly and easily. Depending on changing business requirements, you can always moderate your infrastructure needs as required and keep costs predictable.
Higher productivity
Apart from saving on costs, cloud computing also helps businesses enhance productivity. Cloud storage on a private cloud, for instance, can help companies customize data distribution. It enhances collaboration among remote workers, vendors and customers. Workflows become more manageable thanks to the wide assortment of Cloud tools that makes work and collaboration easier. Cloud deployment through Cloud migration solution takes mere hours compared to on premise installations that may take months.
Much Lower Maintenance and Updating Services
All requirements for maintenance are taken care of by the cloud service providers. This enables businesses to accrue savings through the fixed rate costs. All software updates and patches are also applied automatically by the service providers.
About Ben Ferguson:
Ben Ferguson is the Vice President and Senior Network Architect for Shamrock Consulting Group, an industry leader in digital transformation solutions. Since his departure from Biochemical research in 2004, Ben has built core competencies around Cloud Direct Connects and Cloud migration solutions, SD WAN providers, enterprise wide area network architecture, high density data center deployments, cybersecurity and VOIP telephony. Ben has designed hundreds of complex networks for some of the largest companies in the world and he’s helped Shamrock become a top partner of the 3 largest public cloud platforms for AWS, Azure and GCP consulting. Stay connected at LinkedIn.