Will The Cloud Save Me Money? Myths Debunked

A lot of managers have the perception that the cloud will save them money. This is partly a marketing myth, but the cloud could save you money if…

So, whats the perception about the cloud? (I should probably start with what the cloud is, but won’t)

The perception / feeling, is that you put all the stuff that’s currently in your server room into a hosted solution on the internet. It’s all run by professionals in a way that is better and more efficient than the IT guys you currently have on site. You can then get rid of the IT guys on site because it’s all maintained “in the cloud”. Maybe you keep one junior IT guy just for basic workstation support and you save a ton of money!

Now let’s look at what the cloud is and why I keep putting it in italics 😉

The cloud is not one particular thing or service. In essence the concept of cloud computing is about using a bunch of servers on the internet to host the stuff that’s in your server room. What exactly you host depends on the service offered by the cloud provider and the cost. You can potentially save money because the cloud provider may be able to get bulk discounts on hardware / electricity that you can leverage. Because your server is being virtualized and potentially hosted on multiple servers in multiple geographic locations, you may get more for your money in terms of a “free” bunker site that gives better disaster recovery.

These benefits are only potential benefits. Your cloud provider may not get enough savings to pass on the benefits to you, or may not have the infrastructure set up to offer a bunker feature in the event of a failure (despite having servers set up across the world)!

So far, from a technology point of view, all I’ve described is about where your hardware is hosted. If you decide to move your hardware into the cloud, you can save money on hardware as discussed, but can you save money on IT staff? To answer this, ask yourself how often your IT staff tend to hardware issues? 0.01% of the time? Hopefully not much! So, in this instance, you won’t be able to get rid of any staff.

But what else can the cloud be? It can be any number of value add services beyond this! Your cloud provider could also offer support staff. In this case you could get better quality staff if the ones you have aren’t that good. Maybe you can only afford a junior engineer because you can’t justify a senior engineer as a FTE? Hiring staff from your service provider might be a good thing. It might not. To answer whether this can save you money or improve service, you really have to know the type of work and workload (ebbs and peaks!) of your current engineers. Probably only the engineers will fully uderstand this.

What else can the cloud be? It can offer infrastructure services, such as replacing your AD servers with theirs and connecting you to their domain. It can do the same for email or database servers. Again, think about how much time your engineers spend troubleshooting issues relating to these infrastructure conponents. Notice how I phrased that? “Troubleshooting issues relating to these infrastructure components”.

Putting your AD, email, databases and web servers into the cloud won’t mean that you don’t need staff to look after email, AD, etc. It just means that they don’t have to troubleshoot issues when those services fail. Again, you should be thinking about how much time your engineers spend on these issues – which is hopefully very little. You still need to hire engineers / DBAs to manage performance optimisations, moves / adds / changes / deletes, etc. Depending on your cloud offering, they may not have to take care of the backups of these services. They may still have to spend time testing disaster recovery, learning how the cloud backup works, planning the backup so it can actually be restored from in a way that allows the service to continue, etc. Again, you really have to understand your IT and also what the cloud offering is.

You’ve probably by now realised why I keep putting the cloud in italics. The cloud is not a specific thing. Obviously it’s not in one place, but more specifically it’s a marketing ubrella term for a bunch of different offerings. Because of this, I don’t actually like the term “the cloud”.

Anyhow, hopefully you now have a better idea about how to work out whether the cloud can save you money and that it’s not a simple question / answer. To summarise, to work out if the cloud can save you money, you need to work out:

1. What cloud offerings are available
2. What the offering costs
3. What workloads (if any) will be saved on staff
4. What hardware lifecycle replacement and growth costs will be saved (if any)
5. What tertiary benefits the cloud will bring (if any), such as redundancy, off site backups, better firewalls, faster storage, etc.

This will then give you a basis for how much money the cloud can save you. After this, you then need to ask questions to see if the cloud is appropriate for your business and whether there are any disadvantages of the cloud that you haven’t considered that can cause additional risk / cost.

What is the risk to my data? Will being hosted by a large cloud provider make me more of a target for hackers? Do I need to encrypt data or modify applications to encrypt data? Legally, am I allowed to store my data abroad? What if I want to bring my data back to on site IT? Will there be an outage to services when moving to the cloud? What are the disadvantages of the cloud? How does the cloud effect my support? Does the cloud effect my licensing costs?

Hopefully this article has helped you understand the cloud better, and better understand if it can save you money.