Is it cheaper to host your servers locally or in the cloud? It’s a simple enough question with no straightforward answer. According to the Managing Director of R & G Technologies, Gordon Tan, while moving your organisation to the cloud can result in costs savings, it’s not always cheaper.
“The reason for this is because you’re not comparing apples to apples. Cloud gives you access to enterprise-level technologies and additional features. If you’re comparing apples to apples, the cloud is cheaper, but this isn’t always the case.”
For example, say your on-premise servers perform poorly, so you decide to move to the cloud. The move gives you better functionality, performance, scalability and uptime, and ends up costing more than your old system, because you’re not comparing the cost of exactly the same hardware, software or infrastructure.
If you compare the cost of hosting your poorly performing local system with the cost of hosting a similar infrastructure in the cloud, it would be cheaper. However, the cloud offers you high availability and automatic failover, with far more versatility and scalability than the box sitting in the back of your office.
So where are the cost savings? There are two types of savings. In one situation, you’re saving on tangible dollars including upfront capital costs for licenses, infrastructure, maintenance and support. On the other hand, you’re saving from productivity gains due to a more efficient IT system.
So, how can your business save money with the cloud?
Assess Potential Benefits
Moving your systems to the cloud is like going to a buffet. You want to try everything because it all looks amazing, but you really only need a small portion of what’s on the smorgasbord.
To ensure you don’t end up paying for things you don’t need, ascertain the specific benefits your organisation wants from cloud migration. This includes things such as system uptime, better performance, scalability and remote access, or access from anywhere on any device.
“The biggest mistake small businesses make is not going into this level of detail and immediately jumping to the conclusion that cloud computing is more expensive. Take the benefits you need from the cloud solution and work out specifically what the cost would be from a local perspective. This allows you to do a true cost comparison” - Tan.
The key here is calculating whether implementing these benefits would cost more locally or as a cloud solution, bearing in mind long-term support and maintenance costs. Do a thorough analysis of the possible gains from cloud migration to see whether a cloud solution could save your organisation money.
Research SaaS Products
Once upon a time, quality applications were the exclusive domain of large enterprises who could afford to buy them. However, software as a service now means companies can lease the latest technology resources and access a variety of different payment models. Large organisations benefit from the scalability, while smaller companies can subscribe for advanced IT services beyond what they could have afforded in the past.
It is important to carefully conduct research before diving in to choose your SaaS products. Sincesoftware is accessed through a web browser, there are reduced support requirements, and there’s no need to manage and maintain a complex IT environment. Instead of buying software licenses and servers and hiring technical engineers to maintain them, you pay monthly for your usage, which is often based on the number of users accessing the software. However, certain web services have reduced functionality, and a poor Internet connection could cause slower response times.
Your goal is to save money and improve operational efficiency, so ensure you’re not sacrificing one for the other. Discuss business requirements with your internal IT staff, external consultants, and your cloud provider.
Choose a Reputable Cloud Service Provider
Separating a reliable vendor from the plethora of options on the market can be daunting. Since cloud services are still relatively new, the best you can do when trying to identify a reliable vendor, is to choose an established company with good history.
Even the most well-known cloud service providers experience downtime. For example, Amazon experienced an hour of downtime in August last year. However, the point is to identify providers with as few outages as possible. A trustworthy vendor will make their downtime history log available to potential customers if it’s not already publically available.
Once you’ve shortlisted a few, be sure you thoroughly understand the terms of your agreement. Find out what actions they’ll take if performance metrics are not met and what compensation they’ll provide in the event of data loss.
Remember, your cloud vendor is your business partner. Therefore, you must be meticulous about choosing a vendor with a stable, secure history and a solid future.
How to Save Money With The Cloud
Don’t let the hype fool you. In order to save money with a cloud migration, you need to look at three factors. Firstly, always make sure that you pay only for the benefits you really need. Secondly, adopt web services only after carefully researching how they’ll affect user experience and business operations. Lastly, shortlist reputable vendors and ensure you completely comprehend the terms of the agreement. There’s no doubt that the cloud can cut IT costs, but it is important to verify everything with your internal IT or external consultant before making any pivotal decisions.