Michael Kieran

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Migration to Cloud Computing Driven by Benefits, Not Cost Savings

Dollar bill overlaid with 0s and 1sOn GigaOm recently, Barb Darrow reported that reducing costs is not the main reason companies are moving from on-site deployments to cloud computing.
According to a survey of 600 large companies by Tata Consultancy Services (a huge IT service provider), the ability to standardize software and business processes across the enterprise is the most important factor cited by companies in the U.S. and Asia-Pacific regions, while the ability to quickly ramp systems up or down is the main driver in Europe and Latin America.
These results make sense:

  • When implementing cloud computing systems, many companies focus on specific use cases and benefits, such as the ability for a mobile work force to access and sync content regardless of location, rather than strictly on cost issues.
  • It’s more important than ever that companies be flexible, and cloud computing is fundamentally more flexible than on-premises systems, whether implementing a single application or an entire large-scale system.
  • They reinforce a similar study from Computer Science Corporation in December 2011 that identified mobility and efficiency to be more important benefits in moving to cloud computing, compared with cost savings, which in many cases were minimal.

Besides, cloud computing offers IT managers a different kind of financial incentive: it’s considered an operational expense that can be spread out over the lifetime of the deployment, rather than a huge up-front capital expense requiring all kinds of approvals.
Although some studies show that cloud computing can be more expensive than on-premises deployment over the longer term (5+ years), most CIOs are now moving an increasing percentage of their operations to the cloud, not simply for financial reasons, but because it offers their users benefits they can’t get anywhere else.


Dollar bill image courtesy FamZoo, some rights reserved.


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