Benefits of Cloud Computing
A business manager asked me: “What is the benefit of cloud computing besides saving money to rent instead of buying?”
Answer: Some managers consider cloud computing’s benefit only in term of saving money by “Renting instead of Buying” but that is a simple view because there are much more. By moving Information Technology (IT) functions to the cloud, company’s owners and managers will be able to understand in detail the real costs of technology and its value. For example, Amazon Web Services, the largest cloud computing services in the U.S posted all its pricing openly on its webpage so its customers know exactly how much they pay for their services and what types of service that they are using in details.
In the past, IT managers often negotiated with hardware and software vendors in a closed- door meetings on special contracts so no one knew exactly how much they paid and how much value they got. Even company owners only saw the total cost of IT without understand all the details. By using cloud computing services, everything to do with IT is transparent, especially about the service costs. Because everything is clear, company managers can decide which services they need and which they do not need and make the right decision for cost efficiency purposes. By having Cloud Company taking over many IT functions, a company can reduce capital spending on infrastructure, maintenance costs and software licensing as well as hiring fewer IT people which will reduce total IT costs.
Another benefit is cloud computing enables access of information over the internet from anywhere and anytime without the need to be knowledgeable about the technical detail or infrastructure used to enable it. Similar to people using mobile phone without have to know about how wireless technology works or how switchboard connects phone calls etc. The same is true in cloud computing where all the technical details are handled by the cloud computing services, company and its workers do not have to worry about servers, memory, storage, software licensing, or hardware update etc.
In the past, IT infrastructure was a supporting function of business and companies need to have a strong IT organization to maintain its hardware and software. These IT people often operate in their “own world” with long planning cycle and “secret” IT vendor negotiation. Today, IT has shifted from being just a supporter to a primary strategic function that brings efficiency, quality and flexibility to the changing business due to customers demand. Cloud technology allows the company to focus on the business by eliminate the need to set up an “in-house” IT infrastructure and hiring IT workers. Cloud computing allows workers to access information as an on-demand portal, allowing company to scale up or scale down its usage based on its need. It helps companies to allocate their budgets towards revenue generating activities like selling, getting more customers, keeping customers happy, and grow bigger rather than reserve money for IT functions. Cloud computing has therefore supported companies to improve business efficiencies through optimizing costs, and lower the time to market to access new markets.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
