Cloudonomics Part 1: The shifting economy of the cloud

Posted By: Netcelerate

Published: June 29, 2016 13:52

There’s this weird book out there called Freakonomics, written by two guys who are both named Steve. It basically talks about how the strangest things connect if you trace them back enough, specifically when they connect to the seemingly random changes that occur in a given economy.

Some people are starting to look at the cloud this way, but they may not be explaining themselves very well. So we’ve taken it upon ourselves to try and break this down for you, so you can start to see the changes it can make not only for your own business, but for the community you reside in as well.

You see, there are always two main things that produce positive effects in a given economy: Money and time. If there are ample amounts of both, economies tend to be doing well. Cloud computing can increase the amount of both that your business has. In this instalment, we’re going to dive into the first of the two, money. We’ll explore the time savings in the next article.

Cost Savings

Positive financial results in the world of cloud computing come from a variety of places. The first, and most notable, is in the setup of the cloud, or “hosted”, network in the first place. What this means is that you are going to be moving your data and programs to an offsite, managed system that is watched over by a third party.

Where, in the past, you not only had thousands or even tens of thousands of dollars worth of server equipment to purchase by more to pay a team of people to install it, a hosted service requires no hardware and many times no service charges to set up. This alone can be a cost savings of many thousands of dollars to a business. Now, take a second to imagine a world in which 50% of all businesses made this switch. Freaky, right? There are also longterm maintenance costs that come with the upkeep of a system that can also run into the thousands of dollars per year, something that is also drastically minimized or eliminated completely with a hosted system.

Not only are there very real and apparent upfront costs associated with the purchase of equipment and licenses that come with setting up a network, but there are “hidden” costs as well. Things like the electricity to power a stack of servers is a consideration that many business owners miss. And trust me, they can suck down some juice.

There’s also floor space to consider. After all, whatever you’re paying for precious floor space needs to be optimized. Needing to dedicate a perfectly good space to servers may sound easy until you have to start deciding what you’re not going to have there in order to accommodate it. While not an exhaustive list of the places that you can save money when it comes to switching to a hosted exchange, this covers the big ones. Next up: Time Savings.


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