How the Cloud Can Protect Your Business from Budget Overruns

When your organization moves its business computing solutions from on-premise to the cloud, it stands to gain an impressive list of cost efficiencies that make budget planning much simpler. Especially for medium-sized and small businesses that need to maintain strong cash flow, the cloud offers the opportunity to operationalize hardware and software investments. The cloud also enables decision-makers to calibrate computing resources more precisely to your business needs today–and as they evolve–and to scale expenses up or down accordingly.

The average savings from cloud migration comes to around 15% of all IT spending. Small and medium businesses benefit the most, as they spend 36% less money on IT this way.

Here, we break down some of the most significant cloud cost efficiencies that protect your business from budget overruns:

Pay-as-you-go pricing

Cloud solutions typically come with pay-as-you-go pricing. There are several ways in which this format can save you money and provide you with flexibility. Your company won't have to pay for software your leaders don’t intend to use, and if certain modules turn out to be unnecessary, they can often be eliminated, along with their costs. In contrast to an expensive upfront license, cloud software typically only costs per-user. Pay-per-use software can also be cancelled at any time, reducing the financial risk of faulty software. Cloud solutions are an excellent option for companies who need quality software without having extensive funds available immediately.

Reduction in hardware and software costs

Rather than purchasing equipment and tools for installation, vendors handle all hardware needs. The cost and inconvenience of installing new hardware can be prohibitive for businesses that are growing rapidly. Due to the ease and speed with which resources can be acquired, cloud computing alleviates these issues. In addition, vendors are responsible for repairing or replacing equipment. Vendors also take control of software updates, maintenance, and cyber security. Economies of scale keep these costs in line with the budgets of midsize and smaller organizations.

Additionally, off-site hardware saves space and reduces internal power costs. Data centers consume a lot of space and produce a lot of heat. By moving to the cloud, your business can maximize your office and facility space and significantly reduce your energy costs.

Faster installation and deployment

Cloud computing reduces installation, setup, and deployment time from potentially months to days or even hours. This decreases costs directly and offers potentially larger savings in the opportunity costs associated with all of the man-hours involved in the setup processes for on-premise solutions. With the cloud, your personnel can be deployed to more profitable projects of direct importance to the business.

Streamlining of IT support staff

Purchasing of hardware and software, installation, setup, monitoring, maintaining, and repairing all of the associated equipment requires an IT staff. The more elaborate the setup, the more IT professionals it takes to keep it all running smoothly. A switch to a cloud-based infrastructure eliminates much of the need for on-staff IT support.

Enabling of remote work

The cloud model allows for remote access to computing solutions from any location, at any time. This makes it easy for professionals to work at home or on the road. Remote work had been on an upward trajectory for a few years before the pandemic. The shifts businesses made to continue working through COVID-19 have accelerated the adoption of cloud technologies, which enable remote work. According to the Owl Labs 2021 State of Remote Work Report, 90% of the 2,050 full-time remote workers in 2021 surveyed said they were as productive or more productive working remotely, compared to working in the office. Ladders research projects that 25% of all professional jobs in North America will be remote by the end of 2022, and remote opportunities will continue to increase through 2023. Remote workers are often willing to take less in compensation for the ability to work from home, and having fewer workers in the office reduces the need for costly office space.

Adding, upgrading, and switching software

The traditional purchasing model for hardware and software can result in years to break even. Conversely, adding software modules and features, or even switching from a software package that is not working well for your company can be done with very minimal costs through a cloud subscription model. In addition, working with a single vendor ensures successful integration between software packages and modules.

The cost-effectiveness of the cloud infrastructure has enabled many organizations to acquire computing solutions within a budget that would otherwise be unavailable with traditional on-premise infrastructures. The cloud has enabled these businesses to scale up and down as needed and to be flexible in responding to internal and external circumstances that demand more computing power.