Pretty much every IT person knows the advantages of cloud computing. But for cost-focused C-suite executives, migration can look like an unnecessary expense – particularly when the average organization has just finished paying €1 million+ over three years for IT infrastructure.
Most hardware and software is usually outdated within 12 months. Considering the cost of new servers and solutions, and given the way IT capital expenditure (CAPEX) amortization models are set up, more and more business leaders are rethinking the way they purchase IT – and opting for an operating expenditure (OPEX) model instead.
Let’s look at some of the other reasons why business leaders should consider moving to the cloud – and the benefits of doing so.
Right now, as we’re currently in a period where there’s an urgent need to enable remote working for many employees, companies that are able to leverage cloud technology are finding that they’re in an advantageous position.
However, these are exceptional circumstances. In a more business-as-usual environment, company executives aren’t under pressure to deliver innovation – at least not while things are going well.
So, what will trigger them into rethinking their approach to IT? Any migration needs to begin with a look at genuine business needs; it has to start there.
There are several key questions that businesses need to answer, such as (among others): What type of organization are you? What is your roadmap for the future? Who are your competitors? What is your current spending? What contracts do you have in place?
In short, because of the transformative impact of IT, an entire business can be optimized with the right technology. This means that all processes, overheads, costs, and operational issues need to be closely considered to ensure the right digital environment can be designed.
Cost reductions – or being more cost effective – is also key here. As briefly mentioned above, cloud migration enables businesses to adopt a different payment model – OPEX instead of CAPEX. This essentially means that they pay a subscription fee for access to SaaS products and a remote server (and any Azure and Office 365 SKUs and products bought via CSP) instead of capital repayments to cover a physical investment.
The benefits here are numerous. With an on-premise set up, companies have to plan ahead for the capacity they think they’ll need over several years. The company may be in a period of aggressive growth, so they may opt for a larger server to accommodate a significant number of users.
However, as we’ve seen in very recent times, situations can completely change overnight. Staff can be sidelined, put on furlough, or asked to work from home. In all of these cases, having an on-premise set up puts companies at a serious disadvantage. If there aren’t enough people using the system – then it’s effectively wasting money, and it must run 24/7 regardless of whether it’s operational or not.
One of the biggest advantages of cloud technology is its monthly consumption model. You pay per user, per month, or consumption-based, which enables businesses to scale up and down as need dictates. If staff numbers fluctuate, that can be accounted for. If there’s less capacity needed after working hours, that can be adjusted too. As a result, businesses can save a significant amount of money by operating in a leaner, more needs-based way.
Consider a very good example: a call center. At particular times – after Black Friday in the lead up to Christmas – they typically add 20-30 more agents. Instead of paying for the additional licenses and capacity year-round for access in just one month, you can buy 30 licenses for that particular amount of time and scale up the workloads running the applications. And when the busy season is over, they can scale down again.
When an organization partners with an Expert Managed Services Provider (MSP) and their entire application landscape is cloud-based, they never have to worry about the technology behind it – the software, app, and integrations – becoming obsolete. Access, mobility, and security, as well as capacity and scalability, continue to use the very latest technology solutions available.
In fact, regardless of what kind of business or industry a company is in, running your business application from the cloud is one less thing to worry about. Many routine activities can be automated, it’s easier to use, and companies can actually hand over the management to an Azure Expert MSP who can take care of both implementation and maintenance.
Digital transformation and continuous optimization are about constantly looking at the technology that becomes available, and making sure companies use that technology to improve their own business – hitting their targets, innovating, and reducing costs in line with business and shareholder demands.
Ultimately, businesses should do what they do best and excel at that, rather than get bogged down in IT. By working with an Azure Expert Managed Services Provider like InTWO, that’s made entirely possible.