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Managing Costs and
Aging Infrastructure
There are numerous drivers pushing organiza ons to the cloud, and financial is clearly
one of them. Cloud allows organiza ons to let go of their costly IT infrastructure and shi
compu ng costs to more manageable opera onal expenses. These drivers can be:
Reduced Licensing Costs: Many organiza ons have experienced a considerable
reduc on in license and services spend by adop ng cloud services.
Less Hardware: Migra ng to the cloud enables organiza ons to reduce cost and
maintenance by minimizing the hardware footprint.
Pay for Resources as Needed: As a business grows, resources must rapidly expand with
it, though not before they're really needed, leading to unused capacity and cos ng the
business money. The ability to quickly provision resources as needed, while only paying
for only what is used, is key.
CapEx to OpEx: Moving to the cloud most o en helps lower capital expenditures, as a
simple subscrip on-based model is an easier op on and requires li le to no on-premises
equipment and physical maintenance costs. What's more, opera ng expenses are also
reduced as businesses don't have to have an in-house team monitoring availability 24/7.
It's important though to not assume you will save money by moving to the cloud unless you
have done the crucial work to analyze your organiza on's unique situa on. In their 2015
Cloud Adop on Survey, Gartner recommends:
U lize total cost of ownership and other models on a case-by-case basis.
Segment cloud into use cases.
Look beyond cost issues.
Be certain to check with financial specialists about the implica ons that a switch from
capital expenditure (CapEx) to opera ng expenditure (OpEx) may have. Don't assume
that OpEx is always be er than CapEx.
Keep revisi ng previous cloud analysis as the market and prices fluctuate.
If one carefully looks at each of these financial considera ons, then a move to a cloud
solu on could poten ally be a smart decision that impacts the bo om line and helps an
organiza on remain compe ve.
Challenge
3
47%
Organiza ons con nue to increase
their cloud spend, as much as 47%
in the next 12 months.
Flexera: State of the Cloud 2020
INCREASE
in cloud spend
