The cloud is great for specific functions where it makes sense. There are also many reasons why you might not want to move to the cloud such as lack of control of your data and security concerns but today we are going to be looking at the cloud purely from a cost vs benefit perspective. The major costs can be both indirect and direct so lets start by listing the costs of maintaining and upgrading your on-premises IT infrastructure vs migrating all or some of this to the cloud. Some other considerations include the ability to sustain rapid company growth, a reduction in the IT maintenance costs, and the IT operational costs.
On-Premises Costs:
- The Hardware
- The Labor (installation & maintenance, outsourced OR internal)
- The Physical Space (aka rent)
- The Energy Costs (Cooling, Electricity, etc.)
- Capital Expenditure means money up-front
- Expansion Costs
- Power & Redundancy Costs
- Licensing Costs
Cloud Costs
- The Virtual Hardware
- The Labor (installation & maintenance)
- Flexible pay-as-you-go billing means your IT infrastructure can be an operational expense
- Expansion costs (far less given the ability to dynamically scale your IT up or down to meet workload).
The cost savings for the cloud go even further when you consider that you will not have to go through as many or as frequent hardware refresh cycles. This will save you money over the next few decades because you do not have to do much beyond upgrading the Operating System (which might even be included in your subscription). If you have a very geographically distributed company it might not make sense to pay for a physical location simply to house your IT equipment. If your business has frequent bursts in business or seasonal business surges then the cloud might be a good choice since you can scale out the infrastructure to meet that demand then scale it back down after the rush of business passes. Even better, you only have to pay for what your company actually consumes.
Long story short – when thinking about your next IT upgrade and discussing the cloud it is important to look at this from an overall business perspective instead of simply looking at it from the technical layer. This will ensure you make the best possible decision for your company. (and sometimes that means only moving an application or a specific workload to the cloud while retaining the rest). There are many different scenarios available so if you are wondering how the cloud might fit your business, give us a call or send us an email.
Resources:
https://azure.microsoft.com/en-us/pricing/calculator/
https://azure.microsoft.com/en-us/pricing/
