Cloud Cost Efficiency
Fundamentally, cloud computing is not about cost reduction, but about power multiplication. There are many ways of reducing costs at a company. You could move a building to part of the state that has lower rent, fire half of the employees or end the free coffee in the break room. These all, while technically reducing costs, do not actually contribute to the growth of the organization as a whole. People may have a harder time commuting to a new location, morale would plummet in the case of mass firings, and riots would ensue if the coffee was taken away. Businesses should move to the cloud not just to simplify their structure, but to make it more useful, powerful and flexible. An organization that is able to use the cloud to its fullest potential can double the efficiency of its employees – that’s got to be better than saving a couple of cents.
“Ultimately, the goal isn’t just to have cloud computing, but rather, to propel organizations toward digitization, and break down the hierarchy of decision-making that has defined organizations for decades,” according to Forbes contributor Joe McKendrick.
The cloud allows data to be more easily transferable and noticeable within a company’s context. With the use of cloud-based applications and the packaging of data through application programming interfaces, organizations can make decisions faster and better. Instead of forcing people at the top of a corporate hierarchy to make decisions for everyone in a business on a given day, organizations can offer the tools to those directly working with customers. This enables better service and empowers employees at every level of the organization to get more done. With the cloud, companies can connect data to workers, and thereby connect all employees to each other through the fabric of the information transmitted through the company.
Securing the cloud: how groups make it work together
Cloud computing benefits are widely known, but it is the potential costs that can lead many to be overprotective for their organizations. Worries about security and safety for information on the cloud has led many to to not utilize it to its fullest. However, the cloud can actually be a profoundly useful security tool for groups that may need to reduce risk or find a fast way to protect a large amount of information
“We absolutely need to see cloud as a security solution for many business, not just medium-sized firms or small businesses,” Michael Versace, research director for IDC, said, “but in many ways the largest institutions that can’t scale their own security infrastructures really need to scale out the risk, scale it up and the cloud is part of that solution.”
The cloud can offer organizations the opportunity to protect themselves from hackers by trusting in strong security experts. Data centers can afford to consolidate many security experts working together to protect data. While any individual organization may only have the ability to set a certain amount of money aside for security specialists, a data center provider that works with many clients can necessarily put more money toward protecting that data. In the end, the goal of any data center engineer should be to protect their investment in data infrastructure, which means putting a large sum of money toward security and encryption.
Cloud computing benefits organizations through allowing them to move more quickly and securely. While many groups move to the cloud just to process information more securely, there are many other reasons why they could develop such a platform. Being short-sighted while moving to the cloud could cause organizations to neglect the many other opportunities they have in that transition.
Cost a Big Factor in Fitting in the Cloud
Like every other department within a company, costs and budgeting will always be a big issue for enterprise-class cloud computing. Organizations now realize just how important the cloud is to what they do, but CloudPro’s Rene Millman said potential costs must be measured and weighed before any decisions regarding adoption of the technology are made. Dr. Owen Rogers, digital economist at analyst firm 451 Research, spoke with Millman, noting that costs and capacity measurements are tied together and are two of the most important factors in the adoption of a private cloud computing solution.
“A private cloud is ultimately a fixed capacity, and its utilization will vary depending on the behavior of its applications and the end-users using it,” he says. “From a cost-efficiency point of view, the best situation is when the entire capacity of the private cloud is utilized, so the unit cost per virtual machine is the smallest. … Sometimes the private cloud will be significantly under-utilized, pushing up the unit cost per virtual machine; at other times, the private cloud will be oversubscribed, and some end-users won’t be able to gain access.”
Executives who are in charge of enterprise cloud adoption will need to break down costs by looking at areas like migration, consolidation, adoption, management and compliance. Millman said platforms may also need an upgrade, or a move to a new platform may be necessary to better match up with the cloud services being used by the organization. Cloud professional Brian Gentile said when it is done correctly, the cloud environment should help organizations more easily acclimate to new applications instead of having to retrofit, which would likely reduce reliability.
Cost benefits to switching to a private cloud
TechTarget published an excerpt from “Visible Ops Private Cloud: From Virtualization to Private Cloud in Four Practical Steps” by Andi Mann, Kurt Milne and Jeanne Morain, which said the cost efficiency of private cloud depends largely on the workload, but utilizing this technology should help management strategies become more dynamic and automated. Enterprises must make sure these benefits measure up, however.
“There are fixed and ongoing costs associated with deploying and maintaining the automation and tools that manage dynamic resources in a high-density computing environment,” the excerpt said. “The benefits, which include lower cap-ex and op-ex, must exceed the costs of monitoring, automation, and tooling to justify moving to the private cloud.”
Private enterprise cloud computing should be about 40 percent less expensive than the public cloud would be for those organizations that already have IT resources in place, according to Mann, Milne and Morain.
Custom designed services should be tested regularly to be sure the company is still getting what they would like out of the technology, as agility and application targeting are some of the biggest benefits these organizations will get from the private cloud. If a company is not correctly targeting which apps should move to the private cloud, it may end up becoming filled with those that may be better and more cost effective elsewhere.
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