The benefits of owning equipment are thin when what you have bought will be outpaced within months by the next generation. The new equipment will be faster, more powerful, and cost less to run.
Outsourcing to cloud specialists means running services on better equipment at a lower cost. And not buying equipment means those costs shift from capital to operating expenses. All the expenses are deductible in a single tax year. No more carrying depreciation.
When enterprises make the decision to free up real estate, skilled staff and time by moving to the cloud, the first things they move tend to be email, accounting, software and backups.
"An accounting file on a server or desktop is difficult to access by anyone who is not in front of the computer,” says Sholto Macpherson, editor of Digital First, a website dedicated to accounting technology. “Once it is in the cloud, a company can access it from anywhere and share it with external accountants, auditors, company directors and senior management."
That is why the cloud is where innovation is, Macpherson says. “Accounting software in the cloud can plug into many sources of data, such as e-commerce platforms, inventory and warehouse management, analytics and CRM software. Software developers are prioritizing online software, so the cloud then becomes the best source of innovation."
Email is an area where vendors have significant cloud experience and supporting infrastructure. That makes it another good choice for a first move in transitioning to the cloud.
Cost savings are just one reason. When the US government’s CIO told agencies to identify at least three legacy systems to move to the cloud, many chose email. Their reasons included cost savings and also the potential to:
Provide more reliable services
Offer new collaboration capabilities
Software as a service means lower initial costs. And there is no need to add hardware, software or bandwidth as the user base grows, because that is up to the software provider.
The software provider also manages all updates and upgrades, so there are no patches for customers to download or install.
Cloud backup avoids a common problem in backup infrastructure: a company adds storage in the primary environment but forgets to add additional capacity to match it in the backup environment. With cloud backup, you simply take as much as you need. As you add storage in the primary environment, your cloud service scales to match it.
You reduce your costs because you are not responsible for the infrastructure. And those costs can be predictable with fixed pricing.
The vendor might also offer additional benefits, like making replication between sites and keeping multiple copies.