This price is right: How moving to the cloud can save you money

October 11, 2018 Damian Leopard

One of the most compelling reasons to migrate to the cloud is the well marketed ‘cost savings’ that come from the transition, and with so many providers starting to move their IT infrastructure to the cloud, there’s never been a better time to explore where these cost reductions actually come from.

As you might expect, a recent survey of IT executives revealed that 94% said the cloud would reduce setup and maintenance costs and 47% said their IT costs would drop by 30-50% from the use of cloud infrastructure and apps. While these percentages represent significant long-term savings for any organization, are they indicative of actual savings and if so, where do these cost-reductions actually come from?

The costs of running the infrastructure behind an integration engine can be hard to quantify, but we can look at some of the areas where cloud-based offerings can reduce these costs, compared to on-premise hosting.

From a high level, the savings typically fall into these areas:

  • Low cost of entry: There is nothing to buy upfront, and providers do not need to buy, install, and configure the underlying infrastructure. Not to mention the lack of ongoing in-house maintenance and management costs.
  • Utilization: When deploying in the cloud, providers do not have to plan for the building out of the environment to match the theoretical maximum workloads, since the underlying environment is elastic – in this case meaning that it can grow or shrink (to a point) to match the demand placed on it.
  • Resiliency: To build in the required type of resiliency and redundancy in an in-house data center, providers need to procure everything in duplicate (or triplicate in the case of Disaster Recovery), and then spend even more time setting up those environments. These costs can add up quickly, and often times are just assets that will sit at the ready, but not be in use during normal operations.
  • Reduced staffing requirements: When the IT, or Integration Department, needs to not only configure and maintain the actual Interface Engine, but also the servers, storage, security, and business continuity, the staff size grows or capacity shrinks. The costs, such as salaries, benefits, and training, included in the acquisition and retention of these expensive human resources can be avoided.

In many ways, it is in this last area that I believe a lot of benefit can come from moving your Integration or Interoperability Platform to the cloud. While there will always be a need for an IT department to manage on-site infrastructure, it has rapidly become cheaper and more efficient — thanks to automation — to manage many aspects of that infrastructure in the cloud, taking advantage of Service Level Agreements.

Freeing your IT department from many of the menial, yet costly, responsibilities could allow the skilled personnel to be reallocated internally or focused other areas of the business, allowing for application development or other more technical tasks — further helping your organization to be even more efficient and cost effective.

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