It seems that each day brings us a new concept to learn in the IT world. If you are busy running your own organization and don’t have time to keep up with all the trends and buzzwords, it can get overwhelming. What do all these terms mean, and is the newest trend something that you should be investigating? At Alliance IT, we do our best to educate small to medium sized business owners on the services, hardware and applications that may help their business to run with more efficiency and productivity. To that end, today we are discussing cloud economics, and what the term means to you as a business owner.
Essentially, cloud economics is the body of knowledge containing the principles, costs and benefits related to cloud computing. This knowledge base is what will help CIOs or CEOS to determine if managed cloud services are right for their organization, and how moving to the cloud will affect their budget and staffing challenges. When assessing the economics related to cloud technology, professionals will consider the available infrastructure, management, security needs and technical support. This exercise will determine if the cloud makes sense for their current requirements and growth strategies for the future.
While you may automatically think that the term cloud economics is interchangeable with “saving money”, this is not entirely true. Can the cloud save you money in operationnal costs? Absolutely. But the economics of the public cloud also entails economies of scale, the ability to deliver scalable IT solutions with agility, and perhaps most importantly, to do so with ease and flexibility. So although managed cloud services may save you money in the traditional sense, they can also help to free up staff resource and give your company the ability to react quickly to market and trechnology changes – keeping you competitive in the process.
Cloud Costs & Priorities
Speak to a variety of employees about cloud economics, and you are likely to see a wide range of perceptions about the cost involved in migrating applications and processes to the cloud. The engineering team may value the productivity and capability over the cost, while the CFO may believe that the engineering team should be able to achieve the same results in-house ( and for no additional cash outlay). The bias is real, and it is in a business owner’s best interest to identify the “why” behind someone’s position – in order to most effectively gauge which services are likely to provide the most efficiency and productivity gains for the organization. An initial cost number should never be the sole determinant in decision making, as the benefits down the road may put your company far ahead of the game. Here are some quick recommednations for getting it right:
- Determine what your goals are in assessing the cloud economics. Are they qualitative, such as freeing up your staff for other projects? Or are they qualitative, such as reducing cost by 20% annually? We would all like to save money, of course, but understanding the value across the board will help you to determine if the switch is right for you.
- No matter what your goal, you need to understand your current cloud bill and IT budget. This involves identifying what your resources are, how they are being utilized, and where your money is currently going.
- Once you have a handle on in-place resources (hardware, software, personnel, programs), you can begin to identify under-utilized or outdated resources, or areas which need additional support and funding.
- Put together a team of people who balance the productivity and efficient gains with the budgetary needs; include those with IT and cloud experitse, and those with financial responsibility. In this way, both sides of the table can understand the needs of the other and make the best decisions go forward.
- Bring in professional expertise if needed. A managed services firm can conduct a technology assessment to set a benchmark for where you are today, as well as make recommendations as to the best moves for the future.
The best cloud economics model for your organization will take into account your specific infrastucture, resources and budget. If you need help determining your best way forward, call Alliance IT.
