Any organization who wants to optimize their IT budget will inevitably discover how daunting it can prove to succeed without the right strategy in place, especially during challenging times such as 2020.

According to the KPMG Economic Framework for Decision Making, IT organizations spend over 30% of their budget on infrastructure, of which about 10 - 20% could be saved, if the work were shifted to the Cloud.

The great cost-saving advantage and the Cloud price-run rate come from improved productivity and scalable costs due to newer technologies, best practices, and improved operational efficiency of the Cloud provider.

Cloud helps you reduce IT Costs because:

1. Improved online access and greater accessibility for less

It takes less to rise to consumer and market standards when you dispose of online channels, which are faster and provide flexible delivery. You can innovate by leveraging mobility, social media, the Cloud, big data, and other technologies.

The Cloud is now a top ally of competitive businesses, increasing availability and performance. It provides less disruption that would cost time and money to address and gives higher productivity potential with backups of components that result in immediate reparatory actions.

Full access to information across devices from anywhere in the world is granted so that a collaborative environment can be ensured even with remote work. Through web-based apps, users can even work together in the same documents at the same time.

Furthermore, the Cloud amasses everything in its own storage space instead of on physical devices. So only the minimum of functionalities needed is on the hardware. This decreases the chances of sensitive data being compromised or lost.

2. Lowering the cost of business operations by powering down the data center

For many, a move to the Cloud means a shift away from on-premises data centers. Cloud Infrastructure has taken over how organizations conduct their everyday operations and manage their business growth. Yet, a great number of companies are still reluctant to take the first steps towards a migration.

Those who keep everything on-premise may think this approach is cheaper to administrate. Nevertheless, due to recent challenges in the business environment and the way the Cloud has transformed companies in different industries, on-premise hosting has become harder, if not almost impossible, to justify for the IT budget.

Furthermore, the need for data storage, that has been growing over the years, can be addressed in the public Cloud. The growth in data volumes is likely to become even more resource-consuming in the upcoming years. So companies must handle their storage and data security. Beyond scalability, the Cloud can also enable companies to reduce their total storage costs and provides security as well as scalability.

3. Reducing internal costs and focusing on your core business with the help of outsourcing

By outsourcing non-core activities, you are freeing up capital and resources like manpower, training hours, hiring efforts and so on. This will allow your IT department to focus on internal initiatives and has great potential for cost reductions resulted from improved internal processes.

Budgeting is easier when you have everything up and running with minimal overhead. When outsourcing Cloud solutions, your provider should also offer the expertise you need to administrate your IT budget. It is one of their main tasks to gain a deep understanding of the market and know how to optimize costs. When you benefit from their advice, you can save on training costs, licensing fees and benefit not only from a Cloud services provider but from a partner that will have your interest at heart.

4. Pay only for what you need with IaaS, PaaS, SaaS

The Cloud offers types of architectures you can choose from depending on your company's technical capabilities and IT budget that we covered in this article on Cloud Solutions.

If your budget doesn't fit all pre-built applications needed but you have the technical team to build from scratch, then IaaS or PaaS can be your solution. If, however, your core business is non-technical, and you want to benefit from the ready-to-go package then SaaS is the right architecture type for you.

IaaS solutions are aimed at companies with highly technical skills who have internal resources like time and manpower needed to build applications from scratch. Their developers can manage traffic loads and server maintenance in a scalable way, to offer full control over infrastructure and costs.

PaaS is an optimal solution to an internal development team with limited resources available. You pay to avoid tasks such as runtime and traffic load management. PaaS can be also delivered through a hybrid model that uses both IaaS and on-premise infrastructure to optimize costs with a flexible solution.

SaaS is the trusted solution for companies who want to reduce their budget IT and do not dispose of the technical team needed to deploy their websites and applications rapidly. SaaS offers pre-built applications that can be used to the company's advantage with minimum effort.

Final thoughts

Cloud providers have grown their business at least 15% per year, according to the latest ISG index. Given the current worldwide need for online solutions, the numbers were raised in Q1 and Q2 of 2020 and are expected to follow the same trend throughout the whole year.

For those who investigate better IT budgeting, the Cloud computing offers the major benefit of scalability. A lot of companies are looking for outsourcing providers to help them migrate and increase the productivity of their IT environment and decrease overall business costs.