How Much Can You Save On Your Cloud Computing Implementation?

When it comes to financial savings, figuring out the advantages of implementing cloud computing and whether this can be a good decision for your organization can be a tricky business. Definitely, there are no success recipes in deciding when and how to implement cloud computing. Each enterprise has its own business processes, so it must decide upon the best course of action.

My opinion is that, with companies dealing with reduced budgets everywhere, cloud computing is definitely the way to go when it comes to consolidating IT operations. It can help your company reach both your IT and financial goals. Thus, cloud computing enables you to reduce server sprawl and lower total costs of ownership. Virtualization and cloning is fast, inexpensive and there are no upfront capital costs. When taken as a whole, the economic benefits of cloud computing will make good sense for your company to gain greater ROI from your IT investment.

One the other hand, one might object the difficulty of quantifying the savings. When it comes to potential cost savings, there is a take on this matter that it is impossible to estimate exactly the financial impact that the adoption of cloud computing has on one’s organization. Because time is sometimes hard to quantify in money, it might be a bit confusing to calculate, for example, the reduced costs of the fact that a process runs twice as fast.

However, from my own personal experience, implementing cloud computing has significantly impacted our business processes and helped us to efficiently adjust costs. Our IT processes were much simplified and most of the costs associated with software, hardware or maintenance, have been greatly diminished.

In my latest cloud computing implementation, the time to deploy the speed of delivery of one of the production system decreased from 7 weeks to just a few hours, which resulted in over $300,000 less in hardware and software infrastructure costs and 35% savings with ongoing maintenance and hosting costs per deployment.

To sum up, I believe that cloud computing will bring more efficiency, and will make most IT processes work faster. The overall result will be that the cost of all IT operations will be significantly decreased.

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18 Responses to “How Much Can You Save On Your Cloud Computing Implementation?”

  1. Tim Wessels says:

    I have no argument with you final conclusion that cloud computing will improve the efficiency and agility of IT services with the organization and reduce the overall cost of IT operations. Some cloud pundits think comparing the cost of moving to the cloud with the cost of premises IT services is an “apples to oranges” comparison. And we all know from early schooling that you can’t compare apples to oranges. That said, I do think it is possible to do the math on what it is costing to build and maintain on-premises IT services and break it out for line of business and other applications that may be candidates for the cloud. It may not be a trivial exercise based on the size of the organization and the number of applications. However, not many organization go completely to the cloud overnight, except maybe startups and some SMBs. By moving to the cloud on an app-by-app basis it should be possible to acquire the comparison data within a reasonable period of time so an apples to apples comparison can be made with some confidence.

  2. I am experiencing an apples to apples comparison in my work consulting with companies in the 25M-100M range.
    We are implementing faster because the on-premise IT responsibilities are virtually non-existent.
    We are also implementing faster because the software is easier to adopt. Cloud software takes advantage of internet development and deployment technologies and the result is less confusion, faster learning and general software navigation.
    The benefit is more time to look at the business and how it can be improved.

  3. David Rader says:

    Rick,
    I definitely agree there are financial savings to be had moving to the cloud. I’ve personally seen 33% savings on infrastructure costs for individual applications by leveraging IaaS rather than in house hosting. But, even more importantly, by moving the commodity work to a cloud provider CTO’s and IT departments can save more than just money – they can save time and provide a more agile business environment (http://bit.ly/fSggd1). Letting resources focus on more valuable business oriented activities and move away from commoditized work like installing servers is the key to providing innovation and business growth.

    -Dave

  4. Kyle Murphy says:

    During our ROI research with several SaaS clients we found one source of unexpected savings came from reduced IT staff hours managing servers. Specifically, having all servers in the cloud meant the IT staff got up from their workstations less often. Even though almost all servers can be managed remotely, we noticed many techs would go to the server’s location to deal with an issue, which was a waste of potentially productive time.

  5. [...] CTO, Co-Founder, Entrepeneur, Strategy Consultant « How Much Can You Save On Your Cloud Computing Implementation? [...]

  6. Rick Blaisdell says:

    @ Tim: Yes, I agree, we need to build an ROI calculator that based on type of app, usage and SLA needs, computes savings ;)

    @Carlton, @Smith, @David: Thank you a lot for your comments.

  7. [...] or not for adopting cloud technologies, most people will take into consideration aspects such us financial savings, how well it suits their company, and how much it will simplify the IT processes, [...]

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  9. [...] or not for adopting cloud technologies, most people will take into consideration aspects such us financial savings, how well it suits their company, and how much it will simplify the IT processes, [...]

  10. [...] have no argument with you final conclusion that Cloud computing will improve the efficiency and agility of IT services with the organization and reduce [...]

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  12. [...] or not for adopting cloud technologies, most people will take into consideration aspects such us financial savings, how well it suits their company, and how much it will simplify the IT processes, [...]

  13. [...] Cost: The economic crisis is forcing all businesses to reduce expenses, so this seems to be the most important reason for adopting cloud technologies. There are no upfront investments for hardware and there is the great advantage of only paying for what you use. Cloud computing saves time and money and will also give your business a competitive advantage. Here is an example of how I reduced operational expenses by 30%. [...]

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