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What are the Financial Benefits of Moving to the Private Cloud?

What are the Financial Benefits of Moving to the Private Cloud?

What are the financial benefits of moving to the private cloud? Sure, there are plenty of good reasons, and it makes strong business sense. It’s also extremely efficient, and perhaps most importantly, it enables you to spend more time focusing on your business.

Private cloud is a brand of cloud computing that delivers benefits that are similar to those of public cloud, including scalability and self-service, but through a proprietary architecture. Unlike the public cloud, which provides services to multiple organizations, a private cloud is dedicated to a single company or organization.

The truth is that cloud computing can be utilized for a broad and diverse range of applications, not simply business security. Even though some individuals can have somewhat of a difficult time grasping the concept of the cloud, it is commonly accepted that it saves time and money for both small and large businesses alike.

5 Financial Benefits of Moving to the Private Cloud

Many industry experts can try to explain to you what cloud is and what it isn’t. Here’s our view: Cloud is what we use to call Software as a Service. The difference is that it’s easier to set up, turn on, and is also priced far more competitively.

1. Fully Utilized Hardware

Cloud computing brings accepted economies of scale. The practicalities of cloud computing means high utilization and smoothing of the predictable peaks and troughs in workloads. Your workloads will split server infrastructure with other businesses computing needs. This enables the cloud-computing provider to optimize the hardware requirements of its data centers, which translates to lower costs for you.

2. Decreased Power Costs

Cloud computing does not use as much electricity. That’s an expected result of the economies of scale we just discussed: Better hardware exploitation means more economical power use. When you operate your data center, your servers won’t be fully utilized (unless yours is a very extraordinary organization). Idle servers are not energy efficient. So a cloud service provider can bill you less for energy used than you’re spending in your data center.

3. Lowered Personnel Costs

When we analyze organizations’ computing expenses, the staffing budget is often the largest single line item; it often makes up more than 50 percent of the total. Why so much? Good IT people are costly; their salaries, benefits and other employment expenses usually outweigh the costs of hardware and software. And that’s even before adding in the cost of hiring excellent staff with the proper experience. When you migrate to the private cloud, some of the money you put up for the service goes to the provider’s employment costs. But it’s usually a much smaller amount than if you did all that work without outsourcing. Once again, we have to thank the concept of economies of scale.

Please note: In case you are worried that migrating to the cloud means sacking good workers, don’t. Many businesses that move to private cloud computing find they can reallocate their scarce, valuable IT people resources to departments that make more income for the business.

4. No Capital Costs

When you operate your servers, you’re facing up-front capital costs. But in the realm of cloud computing, financing that capital investment is no longer something you have to worry about. It’s a fact that if you run the servers yourself, the accounting specialists do their amortization work which makes it seem that the expense gets spread over a server’s life. But that capital still has to come from somewhere, so it’s money that otherwise won’t be invested in the company, whether it’s actual cash or just credit.

5. Resilience Without Idleness

When you operate your servers, you have to purchase more hardware than you require in case of a failure. In some cases, you have to duplicate everything. Keeping spare hardware sitting around for an emergency is a costly way to maximize uptime.

So then why not let private cloud services deal with the redundancy requirement? Typical clouds have multiple locations for their data centers, and they copy your data and applications across more than one of them. That’s a cheaper way of doing it, and better way to benefit from the cloud’s economies of scale.

Final Thoughts

Cloud computing is now an established, mainstream choice for many types of businesses, both large and small. Migrating to private cloud will save your time and money, not just for your internal security needs, but also for a wide range of other types of data center workloads.

Article Provided by dinCloud

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