Saving Money With The Cloud

Saving Money With The Cloud

Companies and governments save a lot of money using the cloud. Small businesses cut their costs with 3rd party services, while enterprises and governments often opt for hybrid solutions, outsourcing their storage only partially and using public cloud for a fraction of their computing requirements, for example, hosting the main website.

On the whole, governments and businesses approach the adoption of cloud computing on their own, idiosyncratic terms, which serves the point: there are considerable differences between the needs and wants of each sector.

The government

Governments adopt cloud technologies pragmatically and slowly. The principles, however, remain the same for public and private sectors alike. Cloud computing is used to cut costs and to focus on services, rather than the technology to provide them. The use of the cloud for sharing Curiosity’s photos was a notable exception. Government organizations have been pioneers in making Big Data stand up to its name, with the US Department of Defense taking bids for 4 exabytes of storage back in 2013.

Starting with email optimization, a secure cloud system for the State of California and numerous others, the last few years have indeed seen rapid growth in government adoption of cloud services. Governments are, however, slow to adopt cloud technologies due to perceived security issues, lack of standardization and limping collaboration. We might well have to wait for a few years until governments start taking bolder strides towards moving their apps and data to the cloud.

BusinessesCloud_Econ

It’s suggested–by a study covering 7 businesses with revenues from $50m to $550m–that cloud computing can save about 15% in IT costs. Small and medium-sized businesses benefit greatly from the scalability, the reduced labor expenses and the sheer quickness of deploying something new on a readily available infrastructure. The private sector is more active in adopting the cloud, but its needs are no match to those of military technology and nationwide data.

(Image Source: http://www.computereconomics.com/article.cfm?id=1932)

Businesses with apps that have huge load spikes benefit from the cloud as computing power is readily available and can be switched off at any moment. However, even businesses with a static workload benefit in some other way. When IT staff has the resources to deploy three apps instead of one, good things happen. Failure becomes less of a drag as you didn’t buy 12 state-of-the-art servers just to launch an app, and development costs decrease dramatically.

Skeptics, on the other hand, lament businesses diving into the cloud without prior research. As there are hidden costs associated with cloud computing, it might be sensible to… to do what?

Some suggest waiting for the services to become more cost-efficient. The massive price drops seen in Q2 just might propel more entrepreneurs into taking action. Others suggest waiting for extras that facilitate porting legacy software, a concern Microsoft seem to be acutely aware of, as is made evident by the amount of stuff Azure is equipped with.

This, however, stands true: as with all major decisions, it’s wise to do a metric ton of research, concentrating first and foremost on ROI, before committing to skip the cloud.

What do you think? What are the main benefits, in terms of costs or otherwise, of the cloud? How did your migration work out?

By Lauris Veips

Lauris Veips

Lauris Veips is a freelance writer, hailing from cold and distant Latvia. A cloud enthusiast and supporter of anything innovative.

Comments

  1. says

    I agree that “Companies and governments save a lot of money using the cloud.” but the security issues should not be ignored.

    A recent report “Data Breach: The Cloud Multiplier Effect” by the Ponemon Institute reveals how the risk of a data breach in the cloud is multiplying. 66 percent of respondents say their organization’s use of cloud resources diminishes its ability to protect confidential or sensitive information and 64 percent believe it makes it difficult to secure business-critical applications.

    Ponemon asked “Can a data breach in the cloud result in a larger and more costly incident?” and found that an average data breach cost of $2.37 million it could be as much as $5.32 million if the data is in the cloud. A data breach in the cloud can be 2x more costly.

    The good news is that new cost effective data protection solutions can address this issue.

    Gartner concluded that the “Emerging Technology” defined as “Cloud Data Protection Gateways” provides a “High Benefit Rating” and “offer a way to secure sensitive enterprise data and files stored in SaaS applications”.

    I also read an interesting report from the Aberdeen Group about protecting PII and PCI data. The report revealed that “data tokenization users had 50% fewer security-related incidents (e.g., unauthorized access, data loss or data exposure than tokenization non-users)”.

    Cloud Gateways that tokenize sensitive data looks like a promising approach for cloud security.

    Ulf Mattsson, CTO Protegrity


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