Home office users can save money with cloud computing

Why move to the cloud? There are plenty of good reasons, but mainly it makes good business sense. You can call it efficiency, or call it doing more with less. But whichever spin you prefer, cloud computing lets you focus on what’s important: your business.

Cloud computing can be used for almost all types of applications, not just business security. While the idea of cloud computing can sometimes seem hard to grasp, it’s clear that it saves its users money – especially SMBs, including small office/home office (SOHO).

 

Plenty of oh-so-clever industry people will tell you what cloud computing is and isn’t. Here’s my simple view: It’s what we used to call software as a service (SaaS), but it’s set up so it’s easy to switch on, simple to expand and contract, and usually has a usage-based pricing model.

Read on to discover why moving to the cloud will save you money in five ways (six, if you’re picky)….

 

1. Fully utilized hardware

Cloud computing brings natural economies of scale. The practicalities of cloud computing mean high utilization and smoothing of the inevitable peaks and troughs in workloads. Your workloads will share server infrastructure with other organizations’ computing needs. This allows the cloud-computing provider to optimize the hardware needs of its data centers, which means lower costs for you.

 

2. Lower power costs

Cloud computing uses less electricity. That’s an inevitable result of the economies of scale I just discussed: Better hardware utilization means more efficient power use. When you run your own data center, your servers won’t be fully-utilized (unless yours is a very unusual organization). Idle servers waste energy. So a cloud service provider can charge you less for energy used than you’re spending in your own data center.

 

3. Lower people costs

Whenever I analyze organizations’ computing costs, the staffing budget is usually the biggest single line item; it often makes up more than half of the total. Why so high? Good IT people are expensive; their salaries, benefits, and other employment costs usually outweigh the costs of hardware and software. And that’s even before you add in the cost of recruiting good staff with the right experience.

When you move to the cloud, some of the money you pay for the service goes to the provider’s staffing costs. But it’s typically a much smaller amount than if you did all that work in-house. Yet again, we have to thank our old friend:economies of scale.

(In case you worry that moving to the cloud means firing good workers, don’t. Many organizations that move to cloud computing find they can redeploy their scarce, valuable IT people resources to areas that make more money for the business.)