Public Cloud Savings: Must-Have or Myth?

By | Apr 23, 2014

Discussions about the cloud always include cost. Midsize IT departments want to know what kind of budget they have for deployments, while C-suite executives hope to realize public cloud savings once migration takes place. So much cloud computing hype has been focused around cost that it is difficult to remove the variable from the equation; but it is worth a try: Are cost savings the bottom line for public clouds, or does their utility go deeper?

Under New Ownership

According to MSP Mentor, there are a few "half-truths" most companies have heard so often that they are taken as accurate. First is the idea that every server, every network and every app should move to the cloud. In fact, keeping some resources close to home makes more sense, to allow local IT to refine and improve their use, especially when other tasks are moved to the cloud.

More telling, perhaps, is the notion of cloud adoption based solely on the total cost of ownership (TCO). Instead, it is important for midsize companies to see the cloud as a new way to manage resources and complete tasks, not just a cheaper way to do so. Consider the benefits of an "as-a-service" data analytics solution, for example. Rather than tap internal resources for this bandwidth-heavy task, cloud servers can do a better job with greater access to data sets. Here, public cloud savings may take a backseat to return on investment (ROI).

Going Global

For Leica Geosystems SmartNet North America, the cloud was an ideal solution, notes a recent Search Cloud Computing piece. Leica has quadrupled in size in the last four years as companies in Canada and the United States look to improve the accuracy of their existing GPS systems; they now have a network of 600 stations across both countries. As a result, staff are widespread, but all need access to Lecia's servers at any moment.

To address this issue, the GPS company turned to the cloud. It is often easier to get operational expenditures such as those for the cloud approved because capital expenditures come with the problem of depreciating assets, Product Engineer Tyler Collier told Search Cloud Computing. Not only does the new cloud platform allow Leica to spin up resources on demand, but a move to virtual servers should also boost basic performance. The catch? They will pay 20 percent more per month.

For midsize IT, Leica and similar companies' experiences represent a shift in cloud thinking. While public cloud savings may still be the first thing CEOs or CFOs think about when they consider a migration proposal, lowered cost is only one possible benefit of intelligently deployed cloud environments. ROI goes beyond dollars and cents to innovation and evolution; "how" is more important than "how much."

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. Like us on Facebook. Follow us on Twitter.

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