Reduce IT Costs with Cloud Computing

The Economic Benefit of Cloud Computing


Many small businesses feel overwhelmed by cloud computing at first, but once they realize the economic value many cloud services provide, they take a second look. This window of opportunity for small businesses to scale in ways they could never have before provides them with a great advantage to position themselves against even the largest competitors.




Most cloud services offer economies of scale by leveraging the massive server capacity available.  The cloud is essentially elastic, meaning it can easily scale up or down depending on the demand. A small business with cost constraints can take advantage for this pay-as-you-go cost model rather than purchasing an IT server and managers.




Cloud computing is often referred to as a technology. However, it is actually a significant shift in the business and economic models for providing and consuming information technology (IT) that can lead to a significant cost savings. This cost savings can only be achieved through the use of pooling of “configurable computing resources” otherwise known as resource pooling. According to NIST (National Institute of Standards and Technology) this capability is an important characteristic of cloud computing.



Cloud Resource Pool


Resource pooling is the ability of a cloud to serve multiple customers using a multi-tenant model with different physical and virtual resources dynamically assigned and reassigned according to demand.


Cloud computing economics depends on four customer population metrics:

  1. Number of Unique Customer Sets (n)
  2. Customer Set Duty Cycles (λ,f)
  3. Relative Duty Cycle Displacement (t)
  4. Customer Set Load (L)


These metrics drive the cloud provider’s ability to use the minimum amount of physical IT resources to service a maximum level of IT resource demand. Properly balancing these factors across a well characterized user group can lead to approximately 30-percent savings in IT resources, and enables the near real-time modification of the underlying physical infrastructure required for the delivery of the desired “illusion of infinite resources” synonymous with a cloud computing user’s experience.



How Companies Have Benefitted From Cloud Services


When implemented properly, the cloud computing economic model can drastically reduce the operations and maintenance cost of IT infrastructures. A 2009 Booz Allen Hamilton (BAH) study concluded that a cloud computing approach could save 50 to 67 percent of the lifecycle cost for a 1,000-server deployment. Another Deloitte study confirmed that cloud deployments delivered greater investment returns with a shorter payback period when compared to the traditional on-premise delivery option.


Cloud computing provides some strong benefits and economic incentives. Selecting a public, private, hybrid or community cloud implementation will depend on a customer’s specific application, performance, security and compliance requirements. Proper deployment can provide significant savings, better IT services and a higher level of reliability.


1)  Lower Costs

2)  Capital Expenditure Free Computing

3)  Deploy Projects Faster, Foster Innovation

4)  Scale as Needed

5)  Lower Maintenance Costs

6)  Resiliency and Redundancy


iComputer can help you determine what cloud services your company needs to cut IT costs and maintain efficiency.  Call us for a quote or with any questions.