Article2 min read
How the cloud reduces your direct, indirect and hidden IT costs
Hardware is only the visible part of what IT costs. How the cloud lowers direct, indirect and hidden costs, and why downtime is the most expensive of all.
Is the cloud really expensive, or can it help you reduce costs? Every business wants the best return on what it spends on IT, and the purchase price of servers and equipment is only the tip of the iceberg. Below the surface sit costs that are easy to overlook and often larger. We look at them in three groups.
Direct costs
Direct costs are what you pay for the equipment itself: servers, network switches, firewalls and other appliances, storage, and an uninterruptible power supply (UPS). Anything your business cannot do without should ideally be duplicated, so the business keeps running when one component fails.
All of that needs a server room, with heating, ventilation and air conditioning (HVAC) to keep it at the right temperature, and physical security to keep it safe. On top come internet connections, electricity, alarm systems and a backup solution, preferably at a second location.
Indirect costs
Indirect costs are the people and services needed to keep it all secure and stable: system administrators, network engineers, support contracts with hardware vendors, security guards and utilities.
Hidden costs
Hidden costs are the real danger. What happens when a server fails and your employees cannot work because they depend on it? Every hour of downtime means people who cannot be productive, revenue that is not earned and customers who are not served. The causes range from hardware failure to power cuts, fire and cyber attacks, and you need to be prepared for all of them.
A simple sum makes the point: twenty employees who cannot work for half a day cost eighty working hours, before a single missed order is counted.
What the cloud changes
In the cloud you avoid the upfront investment in hardware and in the facilities to house it. You avoid the indirect costs of maintaining that hardware, because the provider does it at a scale no single business can match. And you reduce the hidden costs of downtime, because redundancy, backup and recovery are part of the platform instead of something you have to add.
That does not make every cloud bill small by default. The savings come from a well-designed environment: the right size for each workload, resources switched off when nobody uses them, and reservations for what runs all the time. That is where we help.
See what we offer in cloud migration and adoption and managed services.