Everyone’s talking about the Cloud: your employees, your colleagues, your competitors. But in an IT landscape that strives to be forward-looking, yet is often tethered to the past (in many cases, in the shape of giant, outdated hardware), it can be hard to make the argument for change. You probably have a few ideas about the well-known benefits of the cloud: greater security, reduced risk, access to data from any location. But you also know that the first question your management team will ask is: “How much will it cost?”
The great news is that moving to cloud-based solutions is a sound business strategy for a number of reasons – and for your CFO, the most important of these benefits is financial. We’ve identified four key financial benefits of migrating to the cloud, which will make this decision an easy one for you and your management team.
1. You can decrease your capital expenditures.
Traditionally, buying servers and hardware translates to a very significant capital expense. Not only that, but those same servers and hardware need to be updated, and essentially repurchased, every 3-5 years. These expenses hit your bottom line all at once – gulp.
By migrating to cloud-based solutions, your initial capital outlay is much lower, and with a subscription-based cloud solution, your expenses are predictable and budget-friendly. There’s no giant upgrade looming over your fiscal year. And shifting this cost from a capital expense to an operating expense gives you the ability to upgrade and enhance your solutions at any time. It’s the best of both worlds – you get enterprise-grade functionality without the high price point.
2. Your IT team will be more efficient and more productive.
Moving to cloud-based solutions nearly does away with the mundane workload and people-costs associated with trouble-shooting and upgrading hardware and operating systems. No longer will your IT team have to squander their time on administrative tasks that make your business no actual money - i.e. server maintenance and constantly recurring upgrades. Instead, they’ll be able to shift their focus to strategic decision-making and business initiative support.
3. Fewer physical assets means reduced risk and fewer unpredictable losses.
A server is a giant, heat-generating, physical asset. No matter the size or geographic reach of your organization, you have a lot invested in this one piece of hardware. And though you hope it will never happen, a fire or natural disaster at any one of your locations could take out your servers in one fell swoop. What is the cost of not having access to those applications? With cloud-based solutions, you can be confident in the fact that, if the worst happens, your data is secure and operations can continue without interruption. Though we don’t like to think of this scenario, the reality is that preparation for any disaster is essential. And the most cost-effective way to do that from an IT perspective is to move to the Cloud.
4. On-demand computing means you only add capacity (and spend money) when you need it.
When you acquire physical assets, such as servers and storage, you logically want to size them for future needs. Often times, you look at a 3-year horizon so you don’t have to “go back to the well”. The downside of this approach is that companies will over buy (and over pay) for today’s needs in order to prepare for future needs that can be uncertain.
Cloud computing provides a flexible, on-demand approach to acquiring computing capacity. You pay for what you need today, and you don’t pay for extra capacity until you need it. If your computing needs expand and contract due to seasonality, a Cloud model can be extra compelling.
Whether you’re a small startup company building an IT infrastructure, or an established, multi-location organization looking to upgrade your legacy systems, it’s imperative that you consider the cloud. In fact, it doesn’t make financial sense to delay this decision. Your gains will be in cost savings, a more strategic IT team, and a more revenue generating workforce. It’s time to move forward by moving up – to the Cloud.
