Are Cloud Services Right for your Business?
Measuring the Total Cost of Ownership (TCO) of IT can be quite challenging as it one compares your existing standalone infrastructure costs along with licensing and maintenance costs over a solution's useful life. Changes in business requirements often require further investment in equipment and software and usually not included in TCO other than a bullet point.
Comprehensive TCO Analysis usually include
Capital Expenses - on premise equipment and software
Operating Expenses - support, service, energy, and maintenance fees required to keep the equipment operating
Indirect Costs - potential downtime and inflexibility resulting in time to market delays as your business requirements change
Fortunately, for medium sized organizations where IT is not a core business asset that provides differentiation, it is usually very clear from rough calculations as to the many benefits of outsourcing IT and utilizing cloud services. Cloud services and outsourced IT services give you access to IT administration and networking services enabling customized cloud design for optimal performance, simplified support over software and infrastructure. Leveraging managed services from cloud services allows companies to free up their staff to focus on revenue generating projects instead of operating infrastructure.
Cloud Services providers usually provide up-time guarantees in the service level agreements that are usually higher than can be achieved with a self-managed on premise infrastructure at much lower cost. This reduces the indirect costs when IT experiences downtime or is inflexible and requires additional capital investment for servers/software/upgrades to update systems to support or focus on new regulations or revenue opportunities.
Unplanned downtime can impact labor productivity, revenue, reputation and customer loyalty. Cloud services can improve system reliability, lower costs and increase flexibility to more rapidly focus on changing business climate and revenue opportunities.
The benefits of going to the cloud vary by each type of organization and factors but the benefits for smaller and midsized businesses are generally much higher with better immediate returns.