Unlocking The Cost Benefits Of Cloud Computing

Unlocking The Cost Benefits Of Cloud Computing

Anirudh Kala, Co-Founder, Director & Chief Data Scientist, Celebal Technologies, 0

Anirudh has worked with companies such as Infosys, IBM, ZS Associates, topcoder, and Vitrana, prior to co-founding Celebal in 2016.

The silver lining of the pandemic has inarguably been the acceleration in the adoption of cloud technology. The rise in remote work and developing resilient applications necessitated the move to cloud computing. In recent years, a major driving factor for cloud adoption has been its potential for increased cost savings. A 2020 study by NASSCOM on India's public cloud market has even reported a 20-25 percent increase in productivity and a 15-20 percent reduction in operational costs for small and medium businesses in India.

Let's take a look at how cloud computing can help with cost reduction for your business. While going through the list, it is important to keep in mind that the cost impact varies for each organization depending on technology infrastructure, IT objectives, type of applications, and others, and that a proper IT strategy is crucial to realize the cost benefits of the cloud.

Eliminate Hardware Costs
The most significant cloud computing benefit is the reduction in capital expenditures with hardware becoming the responsibility of the cloud providers. For a rapidly growing company, a constant need to invest in new hardware can become expensive and inconvenient. Switching to cloud computing can help you scale your resources according to demand. You can eliminate the costs of inhouse data centers, hardware replacement costs, maintenance, and power issues. Moreover, getting started with cloud services is cheaper than setting-up your own IT infrastructure.

Optimize on Power Usage
In efficient server utilization for in-house systems leads to increased energy usage. Energy consumption costs can amount to outrageously large numbers when you have servers running 24x7. Cloud providers with a purpose-built standard data center have optimum server utilization and are extraordinarily efficient leading to less power consumption. With the vast economies of scale and efficient power usage, cloud providers can charge you considerably less for the systems and resources used.

Leverage a Flexible Payment Model
With the pay-as-you-go pricing model of the cloud, your company doesn't have to pay for software that is not being utilized. There is a reduced financial risk as you have the freedom to cancel software usage when it doesn't work. Cloud requires lower initial capital investment, as the up-front cost of the cloud is lower than inhouse solutions. Cloud provides you with remarkable flexibility, especially when you need top tier
products, but don't have extensive funds available. As noted before, the rise in remote work has made cloud a necessity, thereby eliminating the need for large office spaces and helping reduce costs on office space, rent and utilities.

Save on Maintenance Costs
Since hardware is supplied from the vendor and the data is stored offsite, there is no need for a large inhouse staff. The task of upgrading servers and other hardware becomes the responsibility of the cloud providers. You can also reduce monthly overhead and expenses on version upgrades. Reusability of source code on the cloud minimizes software maintenance costs and the cost of version control. You can create reusable components for your software reducing the need for repetitive coding for each version upgrade. Cloud providers also have extensive security and compliance offerings built into their systems, removing the need for separate cybersecurity services.

Taking Into Consideration Your Business Goals And Current Infrastructure, It Is Essential To Come-Up With The Right Plan Of Action To Enable Cost Reductions With Cloud Computing

Transform Productivity & Efficiency
Your employees can access applications, data, and systems on the cloud from anywhere, enabling remote work and business continuity. Cloud allows your workforce to spend less time on software deployment and more time working on new initiatives and application development. Another advantage is efficient systems as the cloud allows processing and analysis of huge amounts of data and applying advanced technologies like Artificial Intelligence and Machine Learning. It is costlier and complicated to execute these technologies on physical IT infrastructure. The automation and innovation that cutting-edge technologies on the cloud bring to your enterprise contribute to making your business more cost-effective.

Also, solutions on the cloud are extremely easy and intuitive to use, leading to reduced training time and rapid adoption among your workforce. You no longer have to worry about recruiting and training IT personnel to work on physical infrastructure. They can be redirected to work on other business areas contributing to company growth and revenue.

The cloud cost benefits listed here are only possible with proper strategy, planning, and management framework. Simply moving to the cloud doesn't convert to cost savings. Taking into consideration your business goals and current infrastructure, it is essential to come-up with the right plan of action to enable cost reductions with cloud computing.

Investing in cloud computing has become an essential step in every organization's digital transformation journey. Whether you are able to capitalize on the potential cost optimization benefits also depends on the IT expertise at your enterprise. The right technology partner can certainly simplify the cloud adoption process and help you achieve cost savings with your cloud applications.