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Most CIO’s in huge brands will tell you how cloud computing has helped them to go to the next level of cutting operational costs and increasing their revenue. Cloud has not only helped them to achieve some of their targets much earlier than they expected, it has also introduced a lot of efficiency in their approach towards business. In general, cloud computing is a very beneficial endeavor, but only if you get it right with your formula, which means going for the type of cloud service that will be most beneficial to your organization. This therefore means that you must first identify your organizational needs and conduct an assessment of the type of cloud system that will be most suitable for such kind of an organization. I can confidently say that this is one area that most organizations fail terribly whenever they are enrolling cloud computing into the organization. This may be highly attributed to lack of planning, which therefore means that there will be a huge lapse in the fundamental structures of cloud computing, and when this happens; your organization may never fully blossom as it should have, despite using cloud. Thus, identifying the specific needs of your organization and matching them with cloud is tantamount to benefiting from cloud computing.
The biggest dilemma that most organizations have when it comes to cloud computing, is whether to handle it in-house, or to outsource the cloud service. For big organizations that are operating on a flexible budget, choosing between the 2 may be a bit harder. This is because their budget allows them to afford an in-house cloud operation or outsource the service from an external provider. It therefore goes down to choosing the type of cloud service that will bring more operational benefits but at a lower cost. However, there are organizations which are more concerned about issues such as security, connectivity, speed and efficiency compared to cost, which only further cements what we discussed earlier, about first identifying your organizations specific needs.
Outsourcing versus on-premise cloud service
What advantages does outsourcing have over on-premise cloud service?
Initial infrastructural costs: The biggest advantage that outsourcing has over on-premise cloud service, is based on the initial infrastructural costs attached to an on-premise cloud service. You need a huge capital outlay on equipment, and an advanced hardware system. Moreover, additional space to host the data center facility would need to be created in the organization, which may interfere with other departments, especially if you do not have any extra space at the company`s premises.
On other hand, outsourcing enables you to avoid any additional infrastructural costs, and all that will be required of you is the basic infrastructure such as computers, and a reliable internet connection throughout the organization`s premises, which is most often already available in most organizations. You therefore get to save a lot, and the funds may be channeled to other organizational needs.
Personnel: Once you create a data center facility to operate the cloud service in the organization, it automatically creates room for additional personnel, which therefore increases the organization’s operating expenditure. You will need people to monitor the traffic on a 24/7 basis, others to ensure that the system is running on secure servers, and that there are no security threats, which means prevention of any security threats and damage control in case there is any security compromise.
Ironically, outsourcing is quite the opposite; instead of hiring extra personnel, you need to downsize the IT department. This is because most of their former job description is obsolete, since it is totally covered by cloud. Downsizing therefore becomes inevitable, but you may retain a few people who will serve as an oversight authority, ensuring that the cloud service is operating optimally, and if there are any loopholes, they should be the first ones to inform the cloud providers. Furthermore, the few IT personal who are left at the organization will play a very significant role in training other employees on how to effectively make use of the cloud service. Some of the applications provided on cloud may be a bit hard to comprehend especially for someone who does not have an IT background, thus the other employees will need proper training before using them. Additionally, you might also need to retain 1 or 2 people depending on your organization’s size of course, to maintain the hardware infrastructure in the organization.
Interestingly, there are also organizations which instead of downsizing the IT department, prefer to redirect their expertise in other organizational departments. For example, some may be sent to lend a hand in the marketing department, while others may be sent to use their IT expertise in the organization`s digital advertising. All in all, outsourcing cloud computing services will greatly cut down your operational expenditure in terms of personnel.
Costs of running and maintaining the data center facility: Operating a data center facility is often a very expensive endeavor, both in terms of personnel and equipment. Data centers usually require repairs from time to time, because stalling of any equipment may greatly affect the overall output. For example, if one server stalls, the other servers will be highly strained and overworked, and this may greatly affect their speed, response capacity and ability to handle a huge amount of traffic.
Upgrading is also another talking point. All the equipment in the data center will need to be upgraded from time-to-time, in order to maintain a competitive edge and keep up with competitors. Moreover, upgrading is inevitable if you want the users to have a good experience on your cloud service. All the data center operational costs consequently increase the organization`s operating expenditure, which may be very expensive for small firms running on a tight budget.
When you outsource your cloud service, maintenance and upgrading lies on the cloud service provider, and you therefore get to save a lot of resources, which may be invested elsewhere and used to generate more revenue for the organization.