The mysterious cloud hovers over small businesses and midsize companies, causing confusion — even fear — about the future of information technology.
But as we celebrate nearly 15 years of ‘cloud computing,’ SMBs everywhere are beginning to see the value of this strange new world. But first, they must see through the Five Myths to reach the promised value of the cloud.
Shelly Edwards of PGI is taking a look at the myths surrounding cloud technology in a five-part series, the third of which tackles the myth that the cloud is too expensive.
Myth 3: “The cloud is too expensive”
One of the resounding barriers to cloud adoption is cost—a barrier that affects mom-and-pop shops and billion-dollar businesses alike. Understanding the cost of cloud services is a longstanding question mark in the minds of small and mid-sized businesses everywhere. And there’s no easy blanket answer, because cloud computing and hosting save more than just hard IT costs.
Reality: The Cloud Means Paying for Only What You Use
For a relatively small business, Forbes estimates that cloud adopters can save up to 30 per cent on total IT costs. Four application and database servers cost approximately $149,000 in-house vs. $106,000 for cloud hosting over three years. When you throw out hardware ownership altogether and move solely to SaaS, PaaS and IaaS cloud models, the cost varies widely depending on software services provided. This seemingly wide range of cost possibilities is because the “cloud” molds to the unique needs of your business.
Off the shelf vs. in the cloud
Historically SMBs have consumed software in large chunks based on the bulk offerings of the software vendor. Microsoft, for example, charges small businesses one price for the Microsoft Office Home and Business suite. Small businesses pay up to $279, regardless of whether they implement one or all five bundled applications. (continued.)
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With today’s cloud software offerings, businesses pick and choose the software services they actually use. And with the market’s newest innovations in SaaS, including Google’s Gmail webmail service, Salesforce CRM and iMeet group video conferencing, businesses, businesses can turn software cost savings into IT solutions that expand reach, capabilities and profitability.
The same is true for cloud hardware and data storage “rentals.” You pay for what you use — and only what you use. And like its software sister, hosted data center services revolve around your unique hardware and software needs, minus the hard-to-predict “soft” costs of maintenance, energy expenditure, downtime, implementation, training and more.
Building a Business Case for Cloud ROI
Because data center usage and cloud software usage varies greatly with the unique needs of each business, forming a blanket business case for cloud spending and savings varies greatly. This is a good thing.
Without all the IT “fat” of unused and data-hungry software programs, your data center becomes leaner, meaner and greener. This new lean data center will cost your business less, whether you have a hybrid infrastructure or fully outsourced IT services model.
In the next issue, we will overview the fourth myth: “The Cloud Means I’m Losing Control.”
You can reach Shelly at
[email protected] or visit
pgi.ca for more information.
