English
Magyar
According to the latest surveys, energy bills for businesses in the EU have quadrupled over the past 12 months, and further increases are expected. Coupled with a shrinking market, this threatens the future of many companies. One way to reduce energy bills and achieve IT savings is to move to the cloud. Here, we examine the benefits.
Outsourcing IT energy consumption
If you have on-premises servers for running applications and storing data, you’ll use an average of 850 watts per hour (two servers, network equipment, and an uninterruptible power supply). If the servers are online 24 hours a day, this means they consume around 7,500 kWh per year. What’s more, you may also have to pay to run an air-conditioning system to cool the servers, which also requires additional energy. All in all, these costs can run to several thousand euros a year.
If you move to the cloud, the price of the package includes all associated energy costs. And although cloud costs have risen globally due to rising energy prices, the impact on customers is less than the price increases seen in the SME market.
Cloud service providers are able to keep prices low for a number of reasons, despite rising electricity costs. For example, we invest heavily in the latest technologies, which, as well as delivering excellent performance and reliability, are also at the forefront of energy efficiency. Similarly, as we operate large data centres, we are able to benefit from greater economies of scale, which makes us even more efficient. We have also secured excellent contracts with energy suppliers and use renewable energy, which is less affected by the usual fluctuations in energy prices.
All in all, therefore, by moving to the cloud, small businesses can significantly reduce their current energy bills and can expect cloud services to be less exposed to the rising costs seen elsewhere in the medium term.
Hardware and other savings
Significant energy savings are not the only way in which moving to the cloud can reduce costs compared to running a server in-house. A server is an expensive piece of kit and requires a significant investment. In the cloud, however, there is no need for such expenditure. Instead, the infrastructure forms part of the service and is paid for via a monthly fee that is much easier to manage and cash-flow-friendly.
By moving to the cloud, we also eliminate other costs associated with on-premises servers. There is no need for physical security or insurance, as there is no server hardware on site. Responsibility for these lies with the cloud service provider. The provider also takes care of maintenance and server administration on your behalf, ensuring the server runs optimally, as well as updating and patching the operating system. As a result, the workload on IT teams is reduced, as are the associated financial costs.
Other financial benefits
Moving to the cloud also offers a number of other financial benefits. The first is scalability. In-house scaling requires the purchase of additional hardware and entails all the costs associated with its use. In the current economic climate, reluctance to invest in scalability – whilst understandable – is preventing many companies from moving forward. In the cloud, scalability is fast, simple and cost-effective. Additional IT resources can be made available on demand with a single click, and are billed on a pay-as-you-go basis. As soon as they are no longer needed, they can be scaled back. This provides unrivalled agility at the lowest possible cost.
What’s more, as most cloud-based applications are open source, there is a real opportunity to reduce software licensing costs. What’s more, even proprietary software can be obtained more cheaply, as cloud service providers often have licensing agreements that allow them to offer it to their customers at a reduced cost.