Recession-weary companies look to the Cloud for their silver lining
Without a doubt, the economic challenges of recent years have brought with them an increased focus on operational efficiency. Indeed, ever since the early 2000′s, businesses have been looking for new and innovative ways to reduce costs across the board and many of these have been successful, at least in terms of meeting their short-term objectives.
Naturally, following these efficiency programmes came significant budgetary restrictions on IT departments. Costs were, and still are, being squeezed, and fewer resources and less experienced personnel must now cope with increasing demands from business users, both in terms of IT expertise and computing requirements. Plus, even before the current economic crisis, many organisations had already begun to slow their technology spend, which has meant that from a refresh cycle perspective, many businesses are “sweating” their technology assets.
Over this period, many firms turned to outsourcing as a solution to this problem. However, even though this approach arguably helped to make some significant savings on IT budgets, it often did little to reduce user concerns around delivery and service. As a result of these pressures, businesses have recently started to look deeper at the management of their IT systems – and consequently the cloud – in a whole new light.
The increasing maturity of cloud computing has coincided inversely with the weakening of the UK economy. This has meant that customers looking for efficiency and new ways to remove costs have been able to use the cloud to move to a more on-demand and commoditised technology delivery model.
In addition, in cases where upfront costs that hit the bottom line are difficult to justify, businesses have also used cloud to move to an Operating Expenditure (Opex) model, rather than a Capital Expenditure (Capex) model. Increased competition amongst cloud providers has also paved the way for competitive pricing for many different services, including 24/7 support, data back-up, disaster recovery and virus and malware protection, as well as an agreed amount of bandwidth – all for a set cost
Today, the biggest selling point of cloud computing is that, in many cases, firms gain access to enterprise-class systems with fewer upfront capital costs, easier implementation requirements, and lower on-going maintenance costs compared with similar in-house solutions. Plus, as this market continues to mature, businesses are benefitting from a much more agile, on-demand delivery of applications and infrastructure that is not only better aligned functionally, but also more focused on delivering business value.
As a result, cloud has paved the way for a much leaner technology organisation that can focus on delivering real business value in a more efficient way. The widespread adoption of Software as a service (SaaS), for example, has enabled certain functions to roll out simple but functionally rich solutions to a team or department relatively easily, and without much/any IT involvement.
Salesforce.com is a good example of how this works in practice, as the company has done amazingly well by delivering an easy to use, globally available, infrastructure-free product that does everything that a sales team needs, and which can be purchased on a credit card and expensed. As a result, this cloud model has been able to empower users, whilst at the same time allowing for the strict governance that is needed to maintain service levels without increasing costs and risks for the company.
For all of these reasons, many IT service providers are now touting cloud services as a silver bullet that can solve every business challenge, but that’s not always the case. Although cloud can do many things, it definitely isn't a one size fits all solution. As such, businesses will ultimately need to weigh up the pros and cons of all their infrastructure options in order to determine which will deliver the cost savings that they hope to achieve.
