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5 Financial Benefits of Cloud Migration

There are a lot of advantages of migrating to the cloud, as we've covered in previous posts. The bottom line continues to be that cloud migration is a path to success for the modern business. While the idea of cloud migration and its myriad benefits seem abstract, the result can increase productivity and significantly decrease cost for SMBs across industries. In fact, an average SMB has a 36% cost saving when migrating to the cloud.

How is this done? Quite simply, the idea behind cloud computing is to provide businesses with the capability to set-up and deploy technology solutions with a usage-based pricing model. Cloud computing is being used today for nearly all types of applications, from a sophisticated Artificial Intelligence (AI) application to Virtual Windows desktops and everything in between; most business are already using cloud in some shape or form.

Today, we'll break down the financial benefits of migrating to the cloud.

 1. Energy Costs

The migration of computing resources to the cloud means that your business will consume less electricity. When you run and maintain your own server room, your servers may not even be fully-utilized but continue to consume and waste energy and resources regardless of demand. A cloud service provider only consumes the energy required to keep your data accessible and charges remain consistent. That is more reliable than the unpredictable circumstances and immeasurable energy waste at an on-premise datacenter.

2. Pay for Usage

Cloud computing is based on economy of scale. Rather than a dedicated server that you own, pay to maintain, and pay for everything else regardless of usage, your workloads will share server infrastructure with the computing needs of other businesses. This enables your cloud computing provider to optimize the hardware requirements of its datacenters and means you're not paying for unused infrastructure, resulting in lower operating costs.

3. Lower Upfront Investment

The upfront investment for an on-premise datacenter is always massive and complex. When you are running your own servers, you not only need the time and resources but you will also need to acquire the following:

  • Servers
  • Storage
  • Firewall
  • Cables
  • Networking Equipment
  • Software licenses

However, the cloud-based model means the capital investment is paid for by someone else. While it is true that a locally run datacenter may provide the benefits of depreciation and amortization but that money has to come from somewhere. It is capital that couldn't otherwise be invested back into the business, whether it's paid in cash or through a line of credit. Cloud computing only requires an initial cost that typically goes toward services like configuration, setup, and migration of resources to the cloud. These costs are considerably lower than purchasing equipment and setting up your own datacenter.

4. Support and Maintenance

Migration to the cloud (such as Azure cloud migration) can also result in significant savings toward labor and maintenance costs. As a result of the cloud provider owning the hardware and storing everything in their own datacenters, there is less demand for in-house IT staff and support is built-in rather than being dependent on multiple tiers of people from different companies. If any hardware requires repairs or upgrades, it is the cloud provider's responsibility and does not cost your company any time or money.

Most businesses enjoy the ongoing support from an external cloud management team after they migrate to the cloud and it helps that extra resources are not necessary to hire an in-house IT staff for support and maintenance in their cloud infrastructure.

5. Disaster Recovery

When business choose to operate and maintain their own on-premise datacenters and servers, they must purchase more hardware than it requires, just in case of failure or damage or even the environment. In some extreme cases, everything must be duplicated. As you would expect from this kind of preventive upkeep, the additional hardware on hand, "just in case," can be a costly method to increase and/or maintain uptime.

Instead, why not delegate the redundancy requirements to a cloud solution provider? Typical cloud providers include multiple regions, multiple data centers, and redundancy plans that provide your data and application up to 99.9% up time. That's not only cost-effective but it actually enhances the business's disaster recovery capabilities .

In conclusion, while the concept of cloud computing can be difficult to grasp at times, it is clear that it saves businesses money and resources. No matter where you are in your digital transformation, make sure to take advantage of new cloud technologies that emerging all the time. Cloud migration can provide the flexibility you need to ensure reliable performance, security, and cost control.


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Yoel Sommer

About the author

Yoel Sommer

Co-founder and a Managing Partner at CSW Solutions. You can find Yoel on LinkedIn and Twitter.



Multicloud, Hybrid Cloud, Cloud Solutions Provider, 2021