Is your company moving more of the IT function to the cloud? If not, you’re likely out of step with peer and competitor companies.
Moving IT resources to the cloud can help your company better track costs and maintain a continuous improvement environment that’s critical as companies undergo digital transformation.
Building a business case
Spending for cloud computing services has been growing at 4.5 times the rate of IT spending since 2009, according to IDC. That rate is expected to increase further, to six times the rate of IT spending, between 2015-2020. During that same time, spending on public cloud computing will increase 142%, from $67 billion to $162 billion by 2020.
Of course, $162 billion is a drop in the bucket compared to the overall IT spending market of $2 trillion annually, but the growth rate should be a wake-up call to the increasing importance of the cloud to more and more companies.
Gartner has outlined financial positives and negatives for moving to the cloud. Check the list and see how these advantages and disadvantages line up with your company.
On the positive side:
- Greater cost agility. Cloud services are based on the amount of users, computing bandwidth or storage space, depending on the model. But what that means is the right-sizing of your computing to what you’re actually using, which can be considerably less than buying and maintaining servers and infrastructure internally.
- Increase retained cash. This is a question about capital expense (CapEx) versus operating expense (OpEx). Moving from CapEx to OpEx smoothes out budgeting to make spending more predictable.
- Reduce opportunity costs. More predictable spending frees up cash to pursue other opportunities that can include furthering digital transformation.
On the negative side:
- Less cost agility. With baseline fees for some Software as a Service (SaaS) offerings, you could end up paying more if you’re only using a few licenses.
- Higher subscription fees. Increasing licensing fees over time may eat into cost savings. Factor that into your calculation, as well as the value that cloud computing can provide.
- Expense to return to on-premise. What if the cloud doesn’t work for you? The cost of moving data back in-house can be high, which is why you should do your due diligence up front.
Advantages to IT staff
Moving to the cloud can free up your IT staff for more value-added functions, such as facilitating your company’s digital transformation.
Looking specifically at app development, a cloud environment can help your organization move to a continuous deployment model, improving the pace of delivery to customers by removing friction between development and production. Continuous development entails releasing new apps and updates frequently, rather than periodically. This immediacy lets developers fix bugs on the fly and bring up new or enhanced functionality when it’s ready.
Rapid deployment inserts the necessary testing into the process flow, so continuous deployment also means continuous testing that can result in more robust apps.
The cloud is waiting … so what are you waiting for?