Besides the technical pros of Cloud Computing comparing to a traditional data center, the financial amenities stood in the foreground as well.
Upfront costs and expenditure type
In a traditional data center an enterprise has to invest in upfront costs for hard- and software and need to assume the capital expenditure (capex) and costs for the operating expense (opex). A Cloud Computing provider however invests well-directed in his infrastructure and offer this as a service. Therefore an enterprise deliver the capital expenditure to the Cloud provider and just pay the operating expense if it’s needed.
Cash Flow and operational costs
As described above, an enterprise has to purchase it’s servers and software in advance. Using services offered by a Cloud provider, costs will only occur when the service is actually used. Regarding the operational costs, an enterprise constantly tries to downsize costs for development, deployment, maintenance etc. This outlay could be dispensed with the service delivery from a Cloud provider. In this case the Cloud provider is responsible for the life cycle of the hardware and software components
At first, investments in an own data center are always made in advance, whereby an enterprise had to assume a huge financial risk without the certainty to get a ROI. Getting services from a Cloud provider, the financial risk is reduced to a time frame of one month, by what the ROI could be measured contemporary as well.
In spite of the recurring discussion – Cloud Value is only about Cost – this myth was invalidated by the statement “Cloud Value is about Business Agility, Opportunities and Investment”. Because Cloud Computing stands for more benefits and possibilities as just convert your costs into variable ones. It allows a company to become more flexible and agile.