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Cloud Computing: The business value is clear

February 07, 2013
 

Last week I cleared up the confusion over whether cloud computing is just another technology fashion retread. This week I’d like to talk about how the cloud can save you big money, and improve the efficiency and competitiveness of your business.

According to a Google-sponsored study, 96 percent of CFOs believe that “cloud computing provides their business with quantifiable benefits”, 94 percent said the cloud will be important to the success of their companies, and just over half of those agreed that cloud computing “offers better value” than traditional approaches to computing, including outsourcing.

If your company faces constrained IT budgets, limited IT staff with right skills, competitive pressures, growing customer expectations, aging systems and fluctuating demand, cloud computing offers some real advantages. Here are some of the ways that your business can benefit from cloud computing:

Cost savings
 

 

By most estimates, the savings from cloud computing is significant – typically between 50 and 66%. One-time saving sources include server and network hardware, systems management and security products, software licenses, and implementation costs. Ongoing cost savings are significant, too. Consider the cost of hardware and software upgrades, annual maintenance and replacements (product and staffing costs), system management, and ongoing facilities costs to house your on-premises solution. Cloud computing allows you to reduce or eliminate these costs through a simple monthly subscription fee.

Business acceleration

Business is continually moving faster, driven largely by enabling technologies. Product cycle times are shorter, business processes are more efficient and customers expect real-time responses to their issues. Cloud computing can help shorten new product delivery cycles, especially when the product-in-question is your business communications. One of our customers cut the time to create document templates from three months or more to two hours and twenty minutes.

The latest technology and technical expertise

Aging systems can be difficult to modernize and maintain, and can often prevent companies from implementing new customer services. In the communications realm, for example, legacy systems often do not support multi-channel delivery. Ripping and replacing your aging technology can be expensive. Deploying in the cloud gives you instant access to the latest technology, and shifts the burden of upgrades, version control, patches and ongoing management and maintenance to the experts at your cloud service provider.

Agility and scalability

What’s easier, justifying a million dollar capital investment or a monthly expense of a few thousand? Cloud computing gets us closer to a true utility model of computing, where you pay a fee that scales up or down as your demands change. It’s an approach that optimizes your cost and provides a more agile pricing model that’s tuned to the fast-changing pace of the market.

Offloading non-core applications
 

 

The IT skills shortage is a well-documented phenomenon. Ten years from now, 70 million baby boomers will have exited the workforce, while only 40 million people will enter the workforce to replace them. In a worldwide study, Deloitte found that between 71 and 82 percent of business and IT executives believe that talent shortages are having a medium to large impact on a range of business issues, including productivity, innovation, quality, time-to-market, and customer relationships. Cloud computing allows you to deploy your precious IT staff on mission-critical applications and data management, while offloading support functions and peripheral applications.

So, with all of these business benefits, how many are jumping on the cloud computing bandwagon? According to a recent Information Week survey, 73% of respondents are either using or planning to use cloud services over the next 12 months. The 27% with no plans for cloud adoption represents a drop from 40% in 2011. If this trend continues, by the end of this year fewer than 15% of companies will remain on the sidelines. Where do you stand on cloud computing?

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