7 cost benefits of cloud computing

Both aspects of a list of cloud computing costs and benefits could be summed up with just two words: "Lots, potentially."

While hosting your application in the cloud does come with a tangible price tag, leveraging the power of the cloud can have a profound positive impact on your business. Fortunately, there are many ways in which cloud computing reduces costs. With careful planning, most companies, especially start-ups and small businesses, can scale their operations and continue building products much faster and more cost-effectively than with on premises hosting.

Reduced Infrastructure Costs

Cloud vendors provide you with a pre-built environment and infrastructure to work with, which eliminates much of the planning and re-inventing of the wheel that comes with setting up an on premises server. In fact, 39 percent of companies report that they fully achieved their cost savings goal through cloud adoption. Having access to pre-built infrastructure saves time (which in turn saves money in labor and operating costs) and eliminates redundancies.

Though a word of caution: If your organization is not yet fully in the cloud, you’ll need to make adjustments to your current network infrastructure to ensure it fits the realities of cloud computing. Take a look at this checklist for more guidance on planning your cloud migration journey.

Enhanced Scalability at a Lower Price

The pay-as-you-go structure of most cloud providers means you get to pay for services you use and customize or upgrade only when and if your operations warrant it, unlike with on premises software which may come with a slew of tools you don’t need but are forced to pay for as a part of your licensing agreement. As long as you’re doing due diligence on your capacity planning, your cloud costs should only increase as your overall operations and subsequent revenue ramp up. This pricing structure makes cloud computing a more affordable solution for agile start-ups and small businesses.

Easier, More Affordable Maintenance

Automatic software updates and other behind-the-scenes maintenance provided by cloud vendors eliminate most of the worries and expenses associated with downtime. When it comes to comparing cloud computing costs and benefits, the convenience of having to do minimal maintenance is definitely in the pros column. In addition, the mobile nature of the cloud makes it easier for your team to access and address issues faster if and when they do arise. This flexibility combined with included updates and maintenance can save businesses money in labor and operations.

Lower Operations Costs

Speaking of reduced labor costs, having a cloud vendor that takes care of the majority of back-end maintenance means can help a small business grow without hiring an entire team of IT specialists. Keeping a leaner team or contracting out some aspects of your IT support means you can spend your budget on more impactful activities such as R&D or effective marketing. Then there are the practicalities of maintaining or cooling a server room, which can mean high electricity bills. Being on the cloud not only makes these expenses go away but also allows your team to collaborate remotely, eliminating the need to pay for a lease. 

Security Advantages of Cloud Computing

Not keeping data on one server makes it harder for malicious agents to do lasting damage to your systems. If a cybercriminal finds an entry point into an on premises system, a much greater share of your network may be compromised. Data and security breaches are notoriously expensive (the average cost in 2022 was $9.44 million in the US) and have repercussions far beyond the initial incident, with reputational damage often leading to a loss of trust with clients. Hosting on the cloud when combined with common-sense security practices can indirectly save you money down the road by making your data harder for unauthorized parties to access.

Fast Data Recovery

As discussed earlier, downtime leads to loss of revenue. But sometimes, interruption to services is inevitable -- power outages, inclement weather, or other forces beyond your control can throw your operations for a loop. With cloud computing, data recovery is fairly instantaneous and much less costly than having to resuscitate your on premises system. Not to mention that if your physical location suffers structural damage it could lead to potentially permanent loss of data and create a thousand and one varieties of expenses and inconveniences. Cloud computing eliminates the potential for any of these costs to become a reality.

Better Quality Control

The cloud is an inherently more collaborative and flexible space, which makes it easier to share data and analytics with team members and clients. This transparency aids with quality control by giving stakeholders greater insights into updates, changes, and new projects before they go live. There’s also an added layer of security since much of the daily maintenance is autonomously run in the background by the cloud vendor and is thus less subject to human error.

Tracking Cloud Computing Costs and Benefits

Though we spent most of this article extolling the cost-benefit of using cloud services compared to hosting your own server, cloud computing is not a silver bullet for a troubled budget. You’ll need to be vigilant about the services you use to make sure your pay-as-you-go plan is actually meeting your needs. Cloud computing costs and benefits also come into stark contrast in any discussion about storage. Balancing your data storage needs is a delicate process -- buy too much and you’ll be paying for gigabytes you don’t need, but don’t buy enough and you’ll get hit with fees. Using automated usage trackers and practicing some cloud cost optimization strategies should save you from most unexpected costs.

Photo Credit: ImageFlow/Shutterstock

Venkat Thiruvengadam is Founder and CEO of DuploCloud.