Budget Buster or Cost-Cutter? The Truth About Cloud Value

Companies are reducing costs in the cloud. As noted by TechRepublic, 82 percent of businesses that perform an ROI analysis of cloud value before making the switch realize these returns, while ITProPortal points out that 91 percent of CIOs want to migrate their on-premises apps to cloud services within the next five years.

A woman at a laptop showing two of her colleagues cloud value.
Cloud value can depend on how you use the services, but the opportunity for cost-cutting is certainly there.

The challenge is separating hype from what actually happens when you adopt the cloud. When handled poorly, a cloud move can leave your company with a full-time budget buster. However, a properly implemented migration to the cloud can cut costs, save time, and make your life easier. Here's how to cash in on cost savings and avoid budget breakdowns:

Immediate Impact

Complexity is the biggest reason companies spend too much in the cloud. According to CIO, the increasing availability and complexity of public cloud services make it easy for businesses to get in over their heads. After all, if a little bit of cloud is good, shouldn't more be better? Before you know it, you have sprawling cloud instances no one's keeping track of and third-party code appearing on the network without permission.

The goal is to start small and plan well. Decide what you want to implement, then implement it. This is where the cloud excels. Since you aren't installing any hardware, deployment is quick and straightforward, while capital expenditure startup costs are virtually nonexistent. Do your homework, find the right provider, and you're in good hands.

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Expenditures and Total Costs

The cloud swaps capital for operational expenses. Instead of shelling out for server hardware, software licenses, and regular maintenance, you can pay to access resources on demand. This comes with a number of benefits — most notably, the use of burst capabilities to handle sudden traffic volumes or meet large-scale computing needs. And when you don't need this kind of power, simply revert to your cloud baseline and pay for what you use.

The common objection here from cloud naysayers is that over time, operating expenses will meet, then exceed, what you would have spent buying and maintaining servers. However, this doesn't hold water. First, servers are expensive. Despite improvements in technology, none come with a 100 percent guarantee. If disaster strikes and employees accidentally pull power cords or wipe server stacks, that's on you to fix — and it's costly. Meanwhile, in the cloud, your provider handles all server maintenance, upgrading, and disaster mitigation. And local IT staff is able to shift focus away from server maintenance to line-of-business objectives, generating cloud value.

Operating expenditure rises, capital expenditure falls, and your total cost of ownership typically decreases year-over-year in the cloud.

So here's the truth about cloud value: You can absolutely spend too much if you're reckless and risky.

Consolidation Considerations

Chances are, you're running a mix of legacy technologies, cutting-edge solutions, and middling third-party apps. The result is a complex network that limits total efficiency. IT pros solve one problem, only to have five more emerge. They might all have the same root cause, but without a unified operating platform, it's difficult to do anything but treat technology symptoms and prescribe quick fixes. By consolidating your IT services with a single cloud provider, it's possible to improve efficiency while reducing your infrastructure footprint.

As noted by Network World, the cloud lets you shift local infrastructure, meaning you're no longer responsible for heating, cooling, powering, and maintaining local data centers. However, that's just the first step. Opting for a single-provider cloud model also offers vendor consolidation. Your provider finds the best vendors to meet your needs, ensures the technology is up to the task, then integrates services across the cloud.

Accounts Trackable

Who is using what on your network? The rise of mobile devices and consumer knowledge has encouraged the development of shadow IT — staff operating outside the IT purview to download apps and access network services. Add in the occasional cloud service, and it's difficult for C-suite members to track what's happening on corporate networks, let alone keep tabs on spending, usage, and overages. Choosing a single cloud provider brings everything under one umbrella, allowing you to see where your money is going, how much is being spent, and what you can do to maximize savings.

Trunk Talk

Maybe you're not quite ready for a full-on move to the cloud. It's better to take the time to do it right than rush and take a loss. However, it's still possible to get value from the cloud. Consider SIP trunking for enterprise communications: You get access to a robust and reliable cloud communications network without the need to shift critical legacy apps or move server stacks to the cloud. It's a great place to start: It's low-risk, high-benefit, and a way to leverage the growing benefits of Voice over IP and unified communications-as-a-service solutions.

So, here's the truth about cloud value: You can absolutely spend too much if you're reckless and risky. However, if you take your time, plan well, and pick the right provider, the cloud has potential as a cost-cutting cornerstone.

Are you ready for the cloud? Talk to a Vonage Business expert.

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