October 19, 2011, 1:58 PM — Outsourcing IT functions such as payroll, website hosting, email, or enterprise resource planning (ERP) has long been normal for businesses of all sizes. But outsourcing critical IT functions including database servers, file servers, document storage, or application development, gives many organizations pause.
Many experienced IT admins point to recent well-publicized outages, data losses, and hacking incidents that have cost companies big in lost productivity, lawsuits or penalties, and even leading to bankruptcy.
Yet, there are substantial benefits to gain through lower costs of infrastructure, utilities, and administration--as well as better availability of services--especially from outside the corporate firewall. Here are the savings you can realize with cloud services.
1. Save on Infrastructure
Rather than buying new servers, operating systems, and applications to provide IT services in-house, you simply pay a monthly fee to a cloud provider. Considering that the cost of a single server with OS and applications can be a couple of thousand to tens of thousands of dollars, this can be a huge benefit, especially if you want to test a new service before a full implementation.
2. Save on Setup and Management
If your IT staff is unfamiliar with a new OS or application, it can be a long, arduous process to implement a new function. Cloud providers have experienced administrators who do nothing but support specific applications. This is one of the reasons for the popularity of cloud-based ERP services--which are notoriously difficult to implement, both in getting hardware and software modules to work together and in configuring the software properly. Likewise, for third-party cloud providers with enough experienced staff, routine chores like monitoring, setting up new accounts, or applying patches are no problem.
3. Save on Utilities
Because cloud providers use large, modern data centers with green features and share infrastructure among multiple companies, their costs to run the small part of the center you're using is much smaller than your costs would be for a server that's likely under-utilized in your own data center.
4. Get Better Performance, More Features
Since cloud providers are providing services to many different companies, they buy large, high-performance systems that offer performance levels much higher than a small company can afford to run internally. They typically have the most capable versions of software and site licenses, so they'll also have access to features at much lower costs than you'd be able to get in-house. Their experienced administrators are more likely to know how to optimize performance than your company is--especially if your IT department consists of one person who also doubles as the art department.