Should You Move Your Business to the Cloud?
Cloud Computing offers the prospect of moving most IT spending from the
balance sheet to the profit & loss account. This in turn removes
capital expenditure, cutting operational expenditure and gives small
firms the budget predictability they need.
Elementary to the Cloud Computing debate is that software is rented rather than bought outright. Finance directors will immediately draw a comparison between the two routes and evidence that after typically 2.5 or 3 years, the rental payments on precisely the same resources would appear to exceed the capital cost: it would thus make little sense to accept a rental agreement.
While that break-point may be correct at first view, Alex Parker of Commensus debates that there are important considerations to be taken into account. “It assumes that any equipment purchased is being fully utilised from the outset. If a company has acquired IT solutions with the capability to take it forward three or five years, for example, it is paying for resources on which it cannot generate a return on capital. Changed circumstances may mean that the capacity is never fully taken up.”
Cloud Computing offers the prospect of moving most IT spending from the balance sheet to the profit & loss account. This in turn removes capital expenditure, cutting operational expenditure and gives small firms the budget predictability they need. IT departments can then concentrate on the front-end issues that will enable business survival and development.
With Cloud Hosting, instead of making one capital commitment to purchase the hardware and another to acquire pricey software, organisations effectively rent both the hardware and the software, paying only for the resources that are actually employed. So you don’t pay anything when services are not needed, doing away with needless overprovision of resources to appropriate for unpredictable spikes in demands. Businesses can go from 20 workstations to 80 and back to 50 again in the time it takes to authorise the online paperwork. This “pay-as-you-grow, save-if-you-shrink” model works out much cheaper in the long run.
In the past, it could take a organisation six to eight weeks to commission an application server. Now, computing power and storage space is becoming a commodity, bought when needed and scaled up when necessary. This dynamic resource management is enabling businesses to react faster to market shifts and realise an advantage over their rivals. It is this agility and scalability that persuades most organisations to venture into the cloud.
But Cloud Computing is more than an IT deployment. Moving into the cloud is a cultural shift as well as a technology shift. For IT staff, and particularly the chief technology and chief information officers, it involves a rethinking of their roles. 70% of time previously wasted on operational maintenance and upgrades is then available to spend focusing on business strategy. This allows a company to take advantage of new opportunities to innovate and grow.
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ABOUT THE AUTHOR
Commensus facilitate clients to save money with innovative Cloud IT solutions. They manage a geographically replicated VMware ESX Enterprise system designed for the FTSE 500 but scaled to be inexpensive for the small to medium sized company. Commensus help customers with solutions such as Cloud Computing, Cloud Hosting, VoIP Phone Systems, Exchange Mailbox, Hosted SharePoint, Virtual Desktop.