Reduce Cost

As a pre-schooler, I used to watch my father type with two fingers on a manual typewriter. The march of technology has been inexorable since 1980 when the PC was first invented by IBM. Now business is conducted via mobile phones, tablets and laptops, with some specialized software applications that require workstations and big display screens.

Traditionally, IT costs that were necessary to support a business were capital intensive. Irrespective of where the servers were located, whether in data center or on-premises, there were long lead times between placing an order and receiving the equipment.

Then there was the need to purchase licences for the operating systems for each server. That was another capital cost that had to be accounted for.

After that additional licences had to be purchased for anti-virus software and other specialized software needed to run the business. Some packaged software had pre-requisites, such as database management software, that could contribute significantly towards higher capital costs.

Then there were ongoing costs of applying security hotfixes, engineering quick fixes for software and major upgrades when new software was released by vendors and the outages associated with the activities.

Some businesses chose to invest in custom software development, whether in-house or by outsourcing to professional software developers, for solving specific business problems. In that case, there were separate costs associated with development, testing and deployment, not to mention the extra lead time required for that.

Now fast forward to the present. The IT industry has evolved and matured to a point where computing and storage capacity can be leased from cloud providers, subject to a reliable internet connection from your business to the cloud. New servers and/or capacity can be requisitioned or released in a matter of minutes or hours, but definitely not weeks and months! So it puts control back in your hand to handle busy or peak periods and shed excess capacity when not required.

Some of the issues mentioned in the previous paragraphs are now outsourced to the cloud provider, thus freeing up your business to focus on revenue generating activities.

Both cloud providers, Microsoft Azure and Amazon Web Services, have professional staff on roster 24x7x365 doing precisely that in their cloud data centers. For SaaS and PaaS options, the cloud provider takes care of deploying security hotfixes, emergency engineering bug fixes, software licencing costs and feature upgrades. In most cases this happens without incurring outages. In rare cases, there may be a brief interruption of service, when applications are “failed over”.

If high availability and business continuity are genuine concerns, they are addressed by appropriate architecture design. In an IaaS type scenario, the cloud providers make available all the plumbing for such solutions, but they do cost more in terms of leasing, as well as, licencing costs.

In accounting terms, leasing is treated as “cost of doing business” That helps to improve cash flow, in the short term, by claiming the leasing costs of cloud infrastructure as tax deductions in quarterly BAS statements.

In summary, by leveraging the cloud for your IT infrastructure, your business reaps all the benefits while outsourcing all the associated headaches to the cloud service provider. I can’t speak on behalf of others, but I love this idea for my own business.

If you would like to learn more about how to leverage the cloud to reduce costs and boost the profitability of your business, please contact Nimble Kumulus now…