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The Monetary Mishaps of Remaining On-Premise

Cloud Cost Savings Series 1 of 3

When companies make the transition from an on-premise configuration to handling their data with a cloud-based solution, three types of cloud cost savings can be expected: monetary, staff and time. In this post, we’ll focus on the monetary savings and how making the transition from on-premise to the cloud can help your company decrease their fixed and variable expenses while increasing the financial health of their IT infrastructure.

Infrastructure Cost

The most significant monetary cloud cost savings is likely its most apparent – infrastructure. The cost of infrastructure necessary to sustain an on-premise setup can range in the millions – a cost that can continue to increase past the initial installation whenever a company needs to expand their server capacity. And these new servers also create extra costs themselves in the form of licensing fees, operating systems and housing, and that’s assuming that your organization wants to be in the data center business at all.

While the benefits of moving to a cloud data solution vary from company to company, a Booze Allen Hamilton (BAH) study concluded that companies can save between 50 to 67% of the lifecycle cost for a 1,000-server deployment. And according to Deloitte, when compared to the traditional on-premise setup, cloud deployments offer a far greater return on investment with a shorter payback period[1].

Labor and Upkeep Cost

When your company moves their infrastructure over to the cloud, any time spent by your IT team on both maintaining the system and ensuring its day-to-day security is removed from the equation. This means that you won’t need additional IT staff if you need to expand, and your current employees can use their time to focus on the unique needs of your business, instead of wasting time on the break-fix model that dominates the lives of so many IT professionals.

Energy Cost

Energy costs go hand in hand with the existence of physical hardware within on-premise systems. Whether you use the entirety of an on-premise server or just a fraction, you must pay for the energy of the entire server. There’s no pay-as-you-go or pay for your portion model. However, when companies use cloud services to handle their IT infrastructure, the cloud providers pay for the energy required to maintain the system. They’re able to do this at a cheaper rate because when multiple companies are serviced by a cloud host and their energy use is consolidated, the amount of electricity used is lower overall.

This has an added benefit for companies that are worried about their carbon emissions. Whether a “going green” focus is instituted because of an internal initiative or because of a carbon emission tax, research shows that moving to the cloud can help your company do its part by reducing their emission levels by up to 50%[2].

Data Breaches

Companies today are well aware of the potentially severe consequences of a data breach. If one occurs, it can cost millions in both fines and lost revenue. However, what most companies might not know is that the majority of data leaks are within on-premise systems.[3] There’s a misconception that moving to the cloud isn’t safe and that if information is stored in-house, that it means someone can’t break in to steal it as easily.

That misconception stands in opposition to the time, expertise and cutting-edge hardware that most cloud hosts dedicate to their customers’ data. These providers are far more likely to have state-of-the-art equipment and up-to-date software than the average company; this allows them to much more reliability safeguard your data than an on-premise deployment ever will be able to. While it might make some companies feel like their data is more secure when they’re responsible for both, protecting it and fixing any issues – the reality is far from it.

Moving your data, especially your financial data, to any new infrastructure is a serious undertaking that requires every benefit to be thoughtfully considered to make sure that you’re making the choice that’s right for you. While moving to the cloud might not be everyone’s highest priority, it’s becoming more and more important every day, and those that don’t pay attention now may face a difficult and costly situation in the future.

To learn more about how Trintech deploys its cloud-based solutions, check out this cloud brochure.

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Written by: Caleb Walter

[1] Jackson, K. L. (2012, May 12). The Economic Benefit of Cloud Computing. Retrieved June 19, 2018, from https://www.forbes.com/sites/kevinjackson/2011/09/17/the-economic-benefit-of-cloud-computing/#a21cf91225c4
[2] Claire Davenport for EurActiv, part of the Guardian Environment Network. (2011, November 07). Cloud computing can cut carbon emissions by half, report finds. Retrieved June 19, 2018, from https://www.theguardian.com/environment/2011/nov/07/cloud-computing-cut-carbon-emissions
[3](n.d.).RetrievedJune8,2018,from,https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/danmunro/2016/08/14/why-we-should-score-data-breaches/&refURL=http://resources.infosecinstitute.com/where-is-your-data-safer-in-the-cloud-or-on-premise/&referrer=http://resources.infosecinstitute.com/where-is-your-data-safer-in-the-cloud-or-on-premise/#4d7e59f85c91