Question

The need to build a new infrastructure to utilize digital technology is constantly increasing, but it is difficult to secure new infrastructure by increasing the number of system resources required indefinitely. If the cost of IT infrastructure is calculated by adding up (1 )fixed and (2) operational costs, what difference will each cost show before and after the introduction of the cloud?

Answer 1

Cloud computing is the delivery of on-demand computing services on the internet that are available at pay-as-you-go pricing. Instead of establishing and maintaining an in-house IT infrastructure, including physical data centers and servers, we can obtain access to efficient technology services, such as computing power, databases and storage from a cloud service providers. Rather than owning their own computing infrastructure or data centers, companies can rent access to anything from applications to storage from a cloud service provider.

Before the introduction of cloud, a company need to sped lot of money to set up the infrastructures such as setting up data centers, data bases, and other IT infrastructure related stuffs. Cloud computing services is that firms can avoid the upfront cost and complexity of owning and maintaining their own IT infrastructure, and instead simply pay for what they use, when they use it. After introducing the cloud both fixed and operational costs are drastically reduced. Cloud Computing delivers numerous benefits for a fraction of the cost of an on-premise solution. Netflix relies on cloud computing services to run its its video streaming service and its other business systems too, and have a number of other organizations. The benefits of cloud computing is mentioned below.

• Reduction of hardware cost :

  Cloud server providers optimize the hardware needs of their data centers, resulting in economies of scale. When you switch to the cloud-based model, the server infrastructure of the cloud provider is shared between your workload and the computing needs of other clients.Depending on the workload, this will ensure the full utilization of hardware sources. Higher efficiencies resulting from economies of scale mean lower costs to the cloud provider, who will in turn reduce costs.

• Power savings:

  The power consumption associated with an in-house IT structure can be outrageously high, especially when servers run 24/7. On the other hand, cloud computing is extraordinarily efficient and consumes less power. Optimum server utilization leads to efficient power usage.

• No In-House Team:

  With cloud computing, a company no longer need to worry about hosting a team to deliver your computing and IT needs. The company also doesn’t need to consider associated expenditures, such as rent for the office space.

• Reduce security cost:

Many Cloud providers, keep the critical data safe through secure and encrypted solutions, firewalls, backup recovery, and redundancy. So, a company does not need to spend a lot of money for security of data.

• Eliminates Redundancies by reducing the additional hardware costs:

  When it comes to managing the systems, one can’t rely on a single hardware to keep things running. There has to be an alternative hardware to keep things up and running if the system crash or fails.Purchasing additional hardware adds to the overall costs. Plus, they require regular maintenance. Incurring maintenance costs for hardware without any purpose sounds unnecessary. An inexpensive way to deal with the redundancy requirements is to move to the cloud. Cloud service providers typically rely on multiple data centers and ensure resiliency by replicating the data. If there is a disaster like a flood, fire, or a system crash happens, cloud computing ensures that the data will be secured.

• Leasing software and customized features :

​​​​​​​ Using a pay-per-use model require actively managing subscriptions to ensure that the users do not misuse the services, and that provisioned accounts are being utilized and not wasted. Resources that aren’t in use will be de-provisioned by the Cloud service provider so as to minimize costs.

So, beyond doubt, after introduction of the cloud, the overall operational cost and fixed cost are drastically reduced. Cloud computing saves the overall costs of server, storage, network, backup and archive, datacenter infrastructure , organization continuity, maintenance and disaster recovery of a company which is using cloud computing.