Part 2 – Demystifying the Cloud

When is using a cloud platform the best choice? What business benefits can this technology provide?

The answers to these questions can be grouped into four areas:

  • The CapEx to OpEx Shift – A more efficient use of IT spending
  • Scalability
  • Rapid Deployment
  • Low-Risk Innovation

The CapEx to OpEx shift

Consistent with most organizations, IT managers or outsourced service providers have direct responsibility for IT budgeting and spending.  While the business owner ultimately approves the expenditure – after all it’s your money and, IT reports to you – Cloud platforms can help your organization spend this money more efficiently.

Often, IT budgets are split into two categories. The first is primary IT needs such as infrastructure and applications like email. The second is spending on applications that provide enhanced or new business capabilities that typically drive efficiencies and revenue. The second group is where cloud infrastructure and services truly shine and can help organizations to achieve this in the following ways:

Usage-based billing:

Businesses do not incur the substantial capital expenditures associated with building and maintaining their in-house IT services. The need for on-premise IT infrastructure such as software, servers, storage & UPS is removed as these requirements move to the cloud. A business’s IT spend linked to its usage of the cloud infrastructure turning the IT spend into a utility-based monthly operating expense while allowing business to scale their requirements up and down based on needs. This ‘pay for use’ billing model can yield considerable savings compared to traditional infrastructure purchases and provide the business owner with greater flexibility and use of capital resources

Cloud platforms provide clear visibility into your IT spending. Rather than ongoing lump sum charges based on your organization’s fixed investment in servers, storage, and ongoing maintenance, you get detailed insight into your


At its core, cloud computing provides on-demand provisioning and allows for the delivery of scalable and elastic IT services, that can be ramped up and ramped down dependent upon demand.

As an example, suppose you create an innovative Web offering for your customers or deploy a new application for your employees. If the application that supports it is running on your servers, making that application scale to handle a rapidly growing load can be a significant challenge. Cloud servers and the infrastructure they run on are built to make this easy to do. Adding extra capacity can be as easy as a few mouse clicks to add processing speed and disk capacity allowing businesses to instantly respond to customer demands without incurring additional capital costs and delays associated with purchasing, provisioning and managing additional company-owned IT infrastructure.

In our next post, we’ll review the Rapid Deployment and Low Risk of Innovation benefits of using the cloud.


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