“Eighty percent of spending on IT just keeps it running,” contends Giobbi. “When you migrate to the cloud, your IT people can focus on other things.”
According to Spokane Software’s Smith, cloud-based software generally has a lower entry price, as there’s no expensive server to purchase. Bringing a new client into the cloud requires less onsite time or possibly none at all, he says.
Not purchasing an expensive server lowers a company’s capital expenses, and potential total cash outlay. However, cloud-based software and data storage is typically accounted as an operating expense, so a shift from capital to operating expenses may need to be factored into the budgeting process.
Guesstimating expenses
To come up with an educated guess, list your direct costs such as fees related to physical servers, software licenses, maintenance contracts, warranties, necessary supplies, spare parts, etc. Then add up the cost of operations, including labor for maintaining servers, databases, and other technology, and even consider the physical space occupied by IT equipment—could this square footage be repurposed? And don’t forget the cost of IT consultants if used on a regular or annual basis.
Puentes admits the cost for Interfresh to transition to the cloud was more than the company’s traditional way of doing business with onsite equipment, but new services and capabilities have since been added. “We’ve been able to add on pieces that before were prohibitively expensive,” he says. “Even though our costs haven’t gone down, our benefits have gone up.”
Bottom line
It’s worth the time to explore the possibilities of the cloud. Compare costs, seek guidance, and find a service provider with solutions well suited to your business.
Or as Puentes urges, “Fit it into your budget and make the move.”
