29 September, 2014
How Companies Are Getting Value From The Cloud – And What You’re Missing
Ask any business leader about cloud computing and the vast majority will tell you how beneficial it can be for their company. As businesses have adopted the cloud, they’ve grown more productive and agile and better able to respond to the rapidly changing marketplace. If one thing is clear, these business leaders believe the cloud is adding value to their companies.
According to a study from Oxford Economics in which hundreds of business executives were surveyed, roughly two-thirds of them said that the cloud added significant value to their businesses.
So what is cloud computing and what value can it can add to an enterprise? A close examination reveals some tantalizing possibilities and realities that all companies new to the cloud or looking into adopting cloud computing should consider.
Calculating the monetary value of the cloud can be a tricky endeavor, in part because it is not as simple as other ways of calculating returns on investment. When looking at the cloud, it may be tempting to simply compare and contrast the overall cost of the cloud with the costs of alternate solutions. Using a cloud provider, for example, usually requires a per month cost, while using your own hardware normally constitutes an initial investment plus the usual upkeep and upgrading costs over the coming years.
But when it comes to the value of the cloud, there are many other factors to take into consideration. This examination of an organization’s current state costs should include data center infrastructure, labor, licensing and training. It should also look at the benefits of the cloud in two categories: total cost reduction and cost avoidance/value-added benefits.
With this in mind, it becomes a little clearer just how to gauge the value the cloud can add to an organization. Cost savings are a truly valuable benefit of the cloud, in particular the savings made from IT expenses and labor costs. By going with cloud computing, businesses will have less need for an extensive hardware infrastructure. That also means less time needed for maintenance of equipment since the infrastructure will be the responsibility of the cloud provider.
Free up IT staff
With less maintenance and hardware, there’s reduced need for a large IT staff. In other words, cloud computing means fewer employees need to be on hand to make sure on-premise technology is running properly. While all of these factors can be measured, something less quantifiable is how the cloud frees up IT personnel to focus more on data management activities and strategies, essentially helping the IT department become more innovative and collaborative.
As has been alluded to above, it’s important not to discount another way cloud computing can add significant value to a company by making it and its employees more productive. This is in part done by increasing the production speed of a business and reducing the overall time to production. In other words, the cloud enables businesses to become more responsive to demands and to improve on their operations as numerous features and functions are taken over by cloud providers. These added efficiencies can also benefit a company by opening up other avenues by which it can increase its value.
Boost company growth
Cloud computing also adds value by creating the conditions under which businesses are able to expand. By making companies more efficient and productive, business expansion becomes an option that many business leaders can then pursue. The cloud can open up new areas that were previously out of reach for many companies by helping employees become innovators in their respective markets.
In the same Oxford Economics study, 40 percent of respondents said that by adopting the cloud, they were able to move their businesses into new geographic areas, while 57 percent said they would need the cloud in order to expand in the next two years. While the true value of this expansion is difficult to calculate accurately, it’s clear that business value does increase, and cloud computing is a vital component of that.
Increased IT efficiency, better production and fostered expansion are just some of the ways that cloud computing can increase a company’s value. How much value largely depends on the ways in which each business uses the cloud and how quickly the technology is adopted, but it is clear cloud computing is an essential part of business growth. Executives have known this for some time now, and those who make it part of their organization will quickly see the benefits that come from it.