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Will cloud computing really cut costs?

Posted on 3 Nov 2010 at 12:53

It's being sold as one of the key advantages of cloud computing. But is there really money to be saved, wonders Simon Brew?

The history of computing is littered with ideas, projects and innovations that have a habit of looking terrifically cost-efficient on paper, yet tend to have a sting in the tale. And as each new innovation shuffles in, it tends to do so with some promise of economies along the way, one that rarely seems to come true.

That doesn’t tend to deter organisations seeking new ideas, though, nor looking for ways in which to cut their budgets in any way they can. And right now, more and more are turning their attention to cloud computing technologies.

In short, we head towards a IT departments buying services instead of products, adding in more storage when they need it

It’s not tricky to see the advantages here. Firstly, there’s a real paper economy to be made simply from software costs, at least if you follow much of the chatter surrounding the cloud. But to be fair, as many organisations have already found to the credit of their bank balance, using a cloud-based software resource such as Google Docs (to quote but one easy example) instantly cuts out the need to invest in individually-installed copies of office software.

This too has a knock-on effect, as fewer human beings are required to go around and set up individual terminals. To cut a long story short there, the savings can be quite substantive.

Take cloud computing to its logical extension, too, and those savings can grow further. Assume, for instance, that Google makes a success of its Chrome OS operating system. That’s pushing towards an entirely cloud-centric way of working, where the traditional way – buying a computer, an operating system licence and software, then tying users down to a desk-based system – is being eroded as fast as people will trust it.

Service

In short, we head towards a IT departments buying services instead of products, adding in more storage when they need it, rather than buying up more drives and configuring them as required. Also, it potentially streamlines and simplifies security and back-up policies and, if all goes to plan, there are genuinely significant economies to be made.

Outside of the balance sheet are benefits too. The notion of collaborative working is one that each edition of Microsoft’s Office suite tries hard to sell us, yet few organisations convincingly utilise it. Instead, even though the obstacles in the way of using Office’s collaborative options are minimal, they do tend to be enough to dissuade organisations from making the most of them.

Cloud software, however, is organically collaborative. Even a simple Google Docs spreadsheet can instantly have several users both contributing to it and chatting about it on the same screen. Just think of the extensive benefits there. The need for a central office in some cases disappears, as users can join together from remote locations wherever they happen to be.