The Desktop Computing era has brought computing power into the hands of the users, but left them still reliant upon IT to provision the back-end infrastructure such as networks, servers and firewalls. Upkeep on in-house infrastructure tends to be daunting and very costly. What’s more, disaster can result at anytime from drive failures, viruses, corrupt databases, server patches and the list goes on. You also need to pay for all the hardware and a team to manage it. Since application servers tend to be driven by departmental budgets, IT infrastructures often end up as over provisioned mishmashes of equipment, processes and technology entailing overstated cost and huge inefficiencies with servers running at 15-25% of capability. Cloud servers, on the other hand, run at 75-90% of capacity. This results in less office space, hardware, staff and power necessities saving a lot of money, and the environment.
Elementary to the Cloud Computing argument is that software is rented rather than bought outright. Finance directors will straightaway draw a comparison between the two paths 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 therefore make little sense to accept a rental agreement.
While that break-point may be right at first sight, Alex Parker of Commensus contends that there are noteworthy considerations to be taken into account. “It assumes that any equipment bought 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 instance, 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 chance of moving most IT expenditure from the balance sheet to the profit & loss account. This in turn removes capital expenditure, cutting operational expenditure and gives small organisations the budget predictability they need. IT departments can then focus on the front-end issues that will enable company survival and growth.
With Cloud Computing, instead of making one capital commitment to purchase the hardware and another to acquire pricey software, companies effectively rent both the hardware and the software, paying only for the resources that are really employed. So you don’t pay anything when services are not needed, doing away with unnecessary overprovision of resources to appropriate for unpredictable spikes in requirements. 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 might take a company six to eight weeks to commission an application server. Now, computing power and storage space is becoming a commodity, bought when demanded and scaled up when necessary. This dynamic resource management is enabling companies to respond faster to market shifts and gain an advantage over their competitors. It is this agility and scalability that persuades most companies 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 requires 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 business to take advantage of new opportunities to innovate and grow.
Commensus PLC (http://www.commensus.com) help companies to save money with innovative Cloud IT solutions.