Cost Savings & Benefits of Cloud Computing

There are several benefits associated with implementing a cloud computing solution. Cloud computing facts, benefits, and potential savings are all addressed, which will help management make an informed decision.

What is cloud computing?

Cloud computing occurs when IT resources are off-site and remotely accessed using an Internet connection. A cloud service provider (CSP) now hosts the daily IT resources user access. As a result, the IT resources are no longer physically in a local business’s server farm or data center. Instead, the servers, databases, and IT applications are only accessible via the Internet. 

What services can cloud computing provide businesses?

Cloud computing delivers any IT service a user typically uses as if accessing a local business server farm. Performing database updates, application processing, business intelligence (BI) actions, and saving business data on cloud-provided storage are all available using the CSP-provided IT services and resources.

What are the benefits of cloud computing?

When a business fully adopts a cloud computing solution, the two most significant benefits are IT cost savings and access to business data from anywhere. Additionally, over ninety percent of the companies that adopt a cloud computing solution claim to significantly improve their cybersecurity posture and meet any mandated compliance requirements. 

In addition to better cybersecurity posture, businesses benefit from the CSP storing their business data in multiple locations. Having business data stored in multiple locations also enhances a company’s disaster recovery posture. Here are some additional cost savings points and benefits when a company selects a CSP:

• 24/7 monitoring with IT experts – Twenty-four-hour monitoring by IT experts is expensive to duplicate with a company’s IT staff, but the 24/7 monitoring is part of an agreed-upon SLA. 
• Scalability – When a business’s demand increases for its product or services, the cloud service provider will automatically match that demand with increased IT resources and decrease the IT resources when business demand drops. 
• Mobility – smartphones, iPads, and Android tablets can access the cloud like a laptop or desktop.
• Loss Prevention – Cloud-based servers in multiple locations containing your business data minimize the chances of losing any business data.
• Automatic software updates – Cloud service providers immediately update any software as soon as the updates are available, which minimizes any potential zero-day attacks.
• Accessibility at any time – business data is available twenty-four hours a day from any location in the world, providing a reliable Internet connection is available at the location.
• Less downtime – with business data stored in multiple locations, one cloud computing location can be offline for maintenance while the other sites are still online.
• Competitive edge – Businesses that move to a cloud computing solution gain a significant advantage by reducing IT labor and IT resource costs versus businesses that keep everything in a local business server farm with continued IT resource costs.

The cost savings and the myriad of concerns regarding a business’s local data center’s availability are eliminated, provided the IT manager has chosen the right cloud computing and deployment models. Each cloud computing model and deployment strategy are slightly different, which dictates cost and any remaining behind IT staff.

What are cloud computing models?

Businesses can move their entire IT infrastructure and software applications to the cloud or retain only selected portions of their IT systems that they will be responsible for maintaining. Here are the differences between the different cloud computing models.

Infrastructure as a Service (IaaS)

With an IaaS solution, the business is responsible for the operating system, middleware, software applications, and business data. However, the CSP’s responsibility is the physical storage space where the business data is saved. 

Platform as a Service (PaaS)

The CSP manages and maintains the operating system, the middleware, and all the hardware associated with the PaaS platform. The business paying for the CSP services is only responsible for the applications and all business data. As a result, the PaaS cloud solution is popular among organizations involved with application development.

Software as a Service (SaaS)

The CSP is responsible for the entire IT infrastructure and platform, and SaaS applications are generally web-based applications that users can access with an internet browser. A SaaS cloud solution eliminates the need to invest in any IT infrastructure or software, and a business’s entire IT budget can be redirected to implementing a SaaS solution. SaaS solutions typically host only one type of application, like a customer relationship management or human resource application. See the visual representation of each cloud computing model. See figure 1.

Figure 1

Once a cloud computing model is chosen, IT managers must decide on a deployment model. The three deployment models are public, hybrid, and private or on-premises, and each is slightly different.

What are cloud computing deployment models?

Knowing the audience accessing a cloud computing model will help managers select the best deployment model. In addition, advanced cybersecurity requirements that are more than what a CSP can provide or retain a portion of an IT staff are factors IT managers need to consider when deciding on a deployment model.

Public cloud deployment

When a business selects a public cloud deployment solution, they will use the cloud service provider’s IT infrastructure. Whether a company is responsible for the operating systems, middleware, and applications depends on the cloud computing model selected. For example, regarding data, a business may be responsible for creating, modifying, and deleting data, but the CSP is responsible for storing your data in the cloud. 

The benefit worth repeating is that business data will be stored in multiple data centers geographically dispersed in an area, region, or state. Public cloud deployments are reliable, scalable, and available to meet business needs anytime. 

Hybrid cloud deployment

Hybrid cloud architectures provide businesses with on-premises and public cloud services. Companies required to maintain some IT infrastructure on-premises and still take advantage of the public cloud services will select this deployment option. For example, businesses that must maintain a higher level of cybersecurity due to a compliance requirement but still need to provide public access to a specific line of business (LOB) can implement a public cloud deployment to meet specific LOB needs.  

IT managers must understand their organizational requirements to align the hybrid cloud architecture with the correct LOBs properly. Hybrid solutions are used mainly by large enterprise organizations with several LOBs.

Private cloud deployment

Businesses that select this deployment option are responsible for all the hardware and software associated with a private cloud solution unless a third-party provider is contracted to support the entire private cloud infrastructure. Additionally, a private cloud will provide some public cloud advantages, such as automatic resource provisioning and self-service, with the added benefit of a more advanced cybersecurity posture that private clouds offer. 

Private cloud deployments can be hosted in a business’s IT data center or hosted in an external IT data center by a local service provider as a managed service. Companies can have an external, dedicated IT team manage every aspect of the private cloud in an IT data center. However, if a business wants to reduce overall IT costs, this is not ideal as a cost-saving option.

Why is cloud computing cost-effective?

Cloud computing is cost-effective because costs usually directed at purchasing hardware and software are immediately eliminated. Operational, maintenance and upgrade costs are all expenses that disappear. The IT staff that does setup and maintenance is eliminated too. The cost savings include the additional benefits of using cloud resources with an improved cybersecurity and data recovery posture outlined in an SLA.

Choosing a cloud computing model and deployment strategy

To get the most out of a cloud computing model, IT managers must understand an organization’s LOBs and any cybersecurity requirements that a CSP cannot meet, including any compliance requirements. At a minimum, IT managers must understand these three items to make an informed decision. 

Every organization is different, so IT managers must form a project charter covering the intended purpose with clearly understood objectives for implementing a cloud computing solution. Whether an organization is large, midsize, or small, stakeholders from each LOB need to provide feedback for an IT manager to make the best decision for an organization.