Apart from technological developments, one of the greatest changes has been in our budgeting of services. Specifically, CAPEX (capital expenditure) to OPEX (operating expenses) allows faster decisions and short sales cycles with cost savings that dont have to be spread out over years as would happen with operating expenses.
Cloud Computing
One of the first steps any organization should take when moving toward public cloud service is consulting their financial experts to assess its effects on budgeting processes and identify any necessary adjustments needed to align the OPEX budget with the IT budget.
Next, we will move away from physical infrastructure towards virtual ones and explore its effects. Naturally, this shift could affect the security policies of your organization.
Cloud adoption requires organizations to devise a migration strategy which includes audits of their existing systems and interdependencies as well as auditing physical infrastructures financial model and determining ROI.
Understanding that servers represent capital investments should help us determine whether assets we plan on moving have paid back their cost; any that havent should be reused over the short to medium-term period.
To effectively leverage the cloud based service, one needs a comprehensive cloud-first architecture, principles and policies framework and governance system in place.
Once virtualization arrives on site, roles and activities usually associated with infrastructures start disappearing logically - replaced by teams, skills and roles with specific roles within them - not only must virtual infrastructure costs be monitored, but so too should its consumption cost after delivery - what are ways of optimizing implementations while cutting post delivery expenses.
Cloud Computing: Benefits
Cloud computing has existed for nearly 20 years. Although its many benefits, such as cost reductions and competitive edge, outweigh its downsides, most businesses continue to utilize it today.
Dell reports that businesses that invest in cloud computing, big data analytics, mobile security and security experience an average 53% revenue boost versus their competition.
This indicates a growing trend where industry leaders and tech-savvy firms alike recognize the advantages of using cloud technology for running their businesses more efficiently, serving clients better and increasing profit margins.
All evidence points in one direction - now is an ideal time to invest in cloud computing!
Recent years have witnessed exponentially growing data usage that makes it harder for both businesses and individuals alike to maintain critical information and programs on physical servers they own.
Cloud computing was introduced as an answer almost as soon as the Internet became a thing; however, only recently has it become mainstream for business goals use.
Cloud computing works similarly to webmail clients: users have access to an entire system with all its features and files without installing anything locally on their computers.
Most people unwittingly take advantage of cloud computing through apps like Gmail, Google Drive and which store users information securely online in a server hosted in the cloud and save it for future access. As useful as these applications can be for individuals, companies that need secure online data storage might find these even more beneficial.
Employees can leverage cloud-based software such as Salesforce to access customer records on smartphones or tablets at home or while traveling; furthermore, authorized parties can quickly share this information around the globe.
There may still be leaders who are hesitant to commit their organizations to cloud computing solutions. We invite you to spend two minutes with us and discover 12 advantages cloud computing could bring to your business operations.
Cost Savings
Are You Concerned about Initial Costs Related to Implementing Private Cloud Services? Dont Stress; 20% of Companies Do.
When considering cloud computings pros and cons, more must be considered than simply initial costs alone.
Accessing data through cloud vendors will save both money and time when beginning projects. Most cloud computing providers allow you to pay only for features you use.
Even if all of its advantages go unused, saving money through multi cloud strategies will still prove worth your while.
Pay-as-you-go data storage solutions also meet client and stakeholder storage needs, with only paying for what space is used - leading to lower prices and greater returns as evidenced in surveys conducted by Bitglass of CIOs, IT managers and leaders from varying fields; 50% reported cost savings as a result of using cloud applications.
Security
Security can be an ongoing worry for organizations considering adopting cloud computing solutions, yet it is often underestimated when adopting them.
How can an organization ensure files, programs and data remain protected when kept outside its physical boundaries? Likewise, what prevents cybercriminals from accessing it remotely?
One major advantage of cloud providers is monitoring security. This makes the solution far more efficient than an in-house one, as organizations must devote limited efforts solely towards IT issues like security.
While companies dont like thinking about an internal data breach happening within their organization, most breaches occur through employees themselves and keeping sensitive data offsite may help keep sensitive information safe. Lets break this concept down further into figures.
94% of businesses experiencing cloud switching experienced an increase in security; 91% said compliance was easier for them with government regulations.
This enhanced protection comes from encryption of all transmitted or stored information - less accessible to hackers or those not authorized to access it; with most cloud services, you can set different security levels based on who uses their service; only 9% can claim they can recover quickly from disasters within four hours or faster!
Flexible
Your business owner needs more time to devote to all its tasks, which means focusing on those which make an immediate difference for its bottom line is increasingly challenging.
A limited IT solution may prevent this focus by forcing too much attention away from core areas like customer relationships. By outsourcing hosting and infrastructure management duties to an external organization, more time will be freed up for areas that directly contribute to profitability.
Cloud computing gives business objectives more freedom and flexibility than hosting data on local remote servers by instantly providing extra bandwidth without costly and complicated IT upgrades.
According to an InformationWeek poll, 65-71% of respondents listed the "ability to meet business application needs quickly" as one of their primary motivations for moving into cloud computing.
Mobile
Cloud computing enables staff with busy schedules or living far away from corporate offices to stay in contact with colleagues and clients via smartphones, other mobile devices or the cloud.
Over 2.6 billion smartphone users worldwide make mobile access an excellent way of making sure no one gets left out; staff who do not live near offices remain accessible through this feature!
By providing information in the cloud for remote workers, employees who work from home and salespeople on the road, you will help achieve a healthier balance between personal life and professional life.
Companies which prioritize employee satisfaction tend to use cloud technologies more extensively than those that dont prioritize employee happiness.
Insight
The data surrounding your business growth processes and customer transactions is full of actionable, valuable information that is just waiting to be identified.
It cannot be easy to sift through all the data and find those kernels, especially if you need the proper cloud computing solution.
Cloud analytics is a feature that many cloud storage services offer.
This allows you to get a birds-eye-view of all your data. You can create customized reports and track your data easily if you store it in the cloud.
Cloud-based insights helped the beverage company Sunny Delight increase its profits by $2 million per year and reduce staffing costs by $195,000 through business outcomes.
Collaboration Increased
If your company has at least two employees, you need to make collaboration one of the top priorities. Collaboration is made easy with cloud computing.
Cloud-based platforms allow team members to view information and exchange it securely. Cloud-based platforms can even offer communal social areas to help employees connect across the organization.
This increases interest and involvement. Cloud computing can make collaboration easier and more effective, although it is more complex.
Quality Management
There is little that can be as damaging to a companys success as inconsistent and poor reporting. All documents in the cloud are in one location and in a uniform format.
You can avoid errors and maintain data consistency by having everyone have access to the same data.
In contrast, managing data in silos may lead employees to save different versions of documents accidentally, resulting in confusion and diluted information.
Disaster Recovery
Control is a key factor in the success of any business requirements. No matter how well-organized your business is, some things need to be improved.
In todays competitive market, even small amounts of downtime that do not produce results can be detrimental. In the service industry, downtime can lead to lost revenue and productivity.
While you may not be able to predict or prevent potential disasters which could harm your business, you can still do something to speed up your recovery.
Cloud-based data recovery services are available for a wide range of emergencies, including natural disasters and power outages.
Loss Prevention
All your data will remain tied to your office computer unless you use cloud computing services, and while this might seem harmless at first, should there be hardware failure in the office, your information could become permanently lost and irretrievable.
Unfortunately, computers malfunction quite regularly for various reasons that many dont realize exist.
There are various threats that threaten laptops, such as viruses and hardware degradation due to age and human error; they can also be stolen or misplaced even with good intentions (over 10,000 laptops are reported lost each week at airports.).
With cloud servers, all your information can be recovered. Cloud storage services allow accessing this data from any computer that connects to the Internet.
Automatic Software Upgrades
For people who are busy, waiting for updates is a major irritation. It saves IT personnel time and money they would have spent on outside IT consulting.
PCWorld reports that half of the cloud users cite requiring fewer internal IT resources.
Competitive Edge
Cloud computing has grown increasingly popular, yet some individuals prefer doing everything locally instead. While that choice remains theirs to make, doing everything locally puts them at a disadvantage in comparison with those taking advantage of cloud solutions such as these - giving your competitors an early head start! Adopting one yourself gives an edge against them.
No longer does simply placing a recycle bin in your break room constitute true sustainability; true environmental friendliness demands solutions at every level of an organization, such as cloud hosting, which leaves fewer carbon emissions.
Cloud infrastructures are eco-friendly by powering virtual services instead of physical products and reducing paper waste, improving energy efficiency and providing employees with access from any location via the Internet.
Pike Research predicted that data center energy use would decline 31% between 2010 and 2020 thanks to adopting virtual data storage options like virtual servers.
The Drawbacks to Cloud Computing
Vulnerability of Attacks
Data theft is a common and prominent cloud computing risk since the companys critical data are stored online. Even large companies with the best security systems are not able to stop a data leak.
Cloud computing is protected by advanced security measures, but the data it stores remains vulnerable to hackers from anywhere in the world.
Requires Network Connectivity
Cloud computing strategy benefits are only possible with network connectivity.
To maximize cloud computing benefits, any business that switches to cloud computing must have an internet connection that is fast and reliable. Cloud computing is limited by the need for good network connectivity. Even remote work can only be done with it.
Downtime
Cloud computing is associated with the greatest risk: downtime. Public cloud providers can face issues due to a variety of reasons, such as natural disasters or power failures.
Other factors include data breakdowns and low Internet connectivity. The cloud platform may be down for a short time or even longer, depending on how severe the issue is.
Vendor lock-in
Migration between platforms may present several complications for companies due to differences between platforms and cloud computing vulnerabilities that must also be managed during this process.
Running applications on one of them might present support problems or configuration challenges, while using another might require changes that incur extra costs and result in extra fees from vendors.
Companies must take necessary precautions in order to ensure applications and data transfer smoothly during migration processes.
Limited Control
Users of cloud computing may have to accept a limited level of control. Cloud applications are hosted on servers owned by service providers, and they manage and own them.
Businesses need help to gain sufficient control to make necessary changes in the backend infrastructure.
Privacy and Security
Cloud computing creates security risks despite meeting industry-wide standards for service providers. Storing critical information on servers owned by third parties poses such a threat; when creating protocols involving data security or privacy must always be carefully considered when creating protocols, especially in regards to sensitive files that must often be accessed remotely with remote access options and, therefore, potential risks such as breaches or malware corruption may exist; security should always be the determining factor when choosing cloud providers.
Cloud Computing Pricing Models Can Be Used To Increase Cost Effectiveness
We discussed this in a previous blog post about cloud cost optimization and analysis. With over 60% of cloud costs due to computing, it is important that you focus on the computer infrastructure.
This post will discuss the pricing models of public cloud providers and how they can be used to optimize costs.
Discovering The Inherent Efficiency Of Cloud Computing Pricing Strategies
The various cloud pricing models can be used to achieve up to 90 per cent cost reductions. These savings are possible without having to change your applications or architecture.
It is important to avoid the inherent tradeoffs in each pricing model so that you are able to fully reap the benefits of cost-savings without sacrificing flexibility or availability.
Well examine how each model is structured, its limitations, and the best way to leverage it.
Demand-Based Instances
Pay-as-you-go is another option that allows you to create and destroy computer instances as you please, provided the type of instance you desire will be available at your desired time.
On-demand offers the highest level of flexibility but is the most costly option. It should only be chosen if no other alternatives are available.
Spots
GCPs Preemptible Virtual Machines option boasts the highest cloud computing solution efficiency with up to 90% in AWS, Azure and 79% on GCP.
Cloud providers often offer spot instances at deep discounts to encourage consumption while decreasing idle resource costs; cloud providers may suddenly disable such instances without warning, potentially leading to data loss, service degradation and other problems.
Spot instances offer mission-critical workloads the flexibility they require without experiencing adverse repercussions to availability or performance.
Users can leverage them effectively by understanding the nuances of this market for spot instances.
This chart depicts Amazon Web Services (AWS) market availability in the us-east-1 region. AWS currently offers around 15,000 spot market instances that vary based on region/availability zones, type and size; they must all meet certain standards to operate properly in AWS ever-evolving ecosystem.
In order to accurately monitor which instances will survive while others might soon expire and migrate their workload seamlessly onto new instances or reserved capacity, monitoring systems with automated processes that gracefully remove instances at risk must also exist to gracefully migrate workloads seamlessly onto new instances or reserved capacity automatically and gracefully terminate them gracefully so.
Attaining this goal may involve either using an outside solution, such as DevOps management and configuration services provided by experts or selecting from among available third-party products and solutions.
Discounts For Reserved Instances, Savings Plans And Commitment To Use
Cloud providers provide various pricing plans tailored for those who anticipate steady workloads with predictable demands over a sustained period.
By signing on for one to three years (with or without upfront payments), potential cost savings of up to 70% could be realized.
Cloud providers provide customers with various commitment options that suit their usage needs. AWS standard reservations may be sold on AWS Marketplace but cannot be applied to different instance families other than that specified; convertible reservations cannot be sold but instead may be customized and applied to various instance family types.
Standard and convertible reservations can also be customized using regional and zone reservations, which provide guaranteed capacity without offering flexibility to modify its zone, size or family of instance reserved; while prioritizing flexibility over capacity guarantees is also an option.
All expenses exceeding your commitment amount will be charged according to demand rates. Google Cloud also offers a committed usage discount in which users commit to using a set number (e.g.
CPUs, memory, GPUs or local SSD storage space) within either 1 or 3 Years.
Google offers an innovative pricing model known as sustained use that gives automatic discounts of up to 30 per cent without needing prior commitment or notice when running workloads between 25-100% of the time each month.
When considering potential savings with using compute resources for extended periods, such as using scheduling tools that turn instances on or off automatically as required, it should also be taken into consideration.
Savings On Reserved Capacity Versus Flexibility
Cloud providers do offer some flexibility with your financial commitment; however, your commitment remains fixed throughout your contracts lifespan.
Either you must pay the agreed-upon compute capacity fee or find ways to recycle it should your project conclude abruptly or resource needs shift drastically.
Planning carefully and constantly reviewing cloud usage across your environments will enable you to identify any capacity commitments which need changing, recycling or offloading (i.e.
selling standard reservations on AWS Marketplace to other users).
Due to the complexity of this matter, companies frequently enlist multiple teams such as DevOps, engineering and finance in estimating planned computing needs and justifying an upfront investment from an ROI perspective.
As illustrated above in the AWS Reservations and Savings Plans example, creating an effective portfolio of reserved capacity requires continuous monitoring by either an internal team with the knowledge or by third-party tools that monitor and optimize committed capacity commitment.
Conclusion
As each pricing model may be implemented individually, most companies apply a combination of spot instances, on-demand capacity and reserved capacity pricing models to achieve optimal savings.
It is crucial that companies consider any possibility that reserved capacity has been committed but unused; such commitment must still be paid regardless. In order to optimize savings, it is wiser for them to utilize all available capacity prior to adding new instances, as this will avoid incurring extra expenses.
On-demand instances are an invaluable solution in cases of insufficient spot instances, reserved capacity or other types.
They help ensure high availability and business continuity - you can manage this via DIY configuration as well as turnkey solutions for cost management and workload automation.
