Six ways enterprises can achieve significant cost reductions by switching to public cloud services
Read More: cloud cloud migration data centres savings
The potential to save money is by no means the only reason for moving to the cloud. Many companies cite potential benefits such as greater agility, easier scalability, and even improved security as drivers for shifting data and applications to a cloud environment.
A cloud migration can end up increasing expenses for companies in certain areas, especially if a lot of updates and maintenance are required. Still, there are ways organisations can save money by moving data, applications, development, and other components of IT to cloud-based services.
The following six examples explain how enterprises can achieve significant cost reductions via the cloud. It is important to keep in mind that the impact on costs can vary greatly, depending on a companys current technology infrastructure, the types of applications it runs, the cloud services being used, and other factors.
For many, a move to the cloud means a shift away from on-premises data centres. That is the case at hospitality company Wyndham Hotels & Resorts, which realised cost savings of 45% by shutting down a data centre and migrating applications to the cloud.
After spinning off from its legacy company, Wyndham decided to exit its corporate data centre, working with partner Rackspace on the migration to the cloud.
We realised early on that we were not going to be able to completely migrate to the cloud right away, especially with some of our legacy applications, said Scott Strickland, executive vice president and CIO at Wyndham. Through partnering with Rackspace, we determined that a colocation strategy made sense as a launching point toward a long-term IT evolution.
The company began by identifying anchor applications that could be moved to a cloud-based,software-as-a-service(SaaS) model. These applications included its central reservation system, property management system, and content management system.
Once we moved those applications into a SaaS model, we addressed probably 50% of the computing power in our traditional data centre, Strickland said. In total, we were able to move about 200 applications to the AWS [Amazon Web Services] cloud, with the rest of the workloads being handled in a colocation facility.
Wyndham originally had about 280 applications hosted in the data centre. Working with Rackspace, the company was able to retire close to 70 of those and move the remainder to the combination of colocation and AWS.
The cost savings were driven by having fewer resources tied up in managing the data centre, eliminating the need for data centre leases, reduced maintenance costs for operating systems and databases, reduced hardware costs, and moving into a virtual environment.
For some companies, especially global enterprises, telecommunications costs can be among the most significant business expenses.
Cloud communications, in which telecommunications applications are provided over the Internet, offers ways to save money.
With the advancements of voice over Internet protocol (VoIP) over the years, voice has become part of the shift to the cloud. Companies can replace conventional business telephone equipment such as PBXs with a cloudservice, and the cloud can become a platform for voice, data, and video communications.
Several trends are pushing more companies toward cloud communications. One is increasingly distributed operations across branch and home offices. Another is that organisations need to provide access to enterprise networks via more types of devices such as smartphones.
Avery Dennison, a global materials science and manufacturing company, as part of a modern telephony initiative has been gradually replacing its legacy PBX systems with a cloud-based virtual phone system.
With this effort, the company uses capital more effectively by avoiding expensive on-premises products, said Nicholas Colisto, vice president and CIO. The cost for a local PBX is more than $1.5 million, he said, and while savings varies based on individual sites, Avery Dennison has saved 25% to 40% in communications costs.
Data storage volumes have been growing at a significant rate over the years, as organisations gather more information from websites, mobile devices, e-commerce transactions, social media, enterprise applications, and other sources.
With the emergence of the Internet of Things (IoT) and edge computing, the growth in data volumes is likely to become even more significant in the coming years.
Many organisations are turning to the cloud to help handle their big data initiatives. The easy scalability of the cloud makes it a potentially ideal model for data storage. But beyond scalability, the cloud can also enable companies to reduce their total storage costs.
For example, Myers-Briggs, a provider of people development products and services, moved the primary data storage, backup, and disaster recovery for one of its facilities into a cloud-based, on-demand storage service.
By moving storage into the cloud service, Myers-Briggs saw a reduced total cost of ownership for data storage of at least 50%. Not including savings from reductions in time spent managing backup, storage, and disaster recovery systems, the company anticipates saving $150,000 over five years on the cost of backup system licenses and storage capacity.
Big data analyticshas become a key IT initiative at countless organisations looking to glean insights from treasure troves of data. The cloud can deliver the processing power needed to support these initiatives, which can also lead to cost savings.
The Financial Industry Regulatory Authority(FINRA), a not-for-profit organisation authorised by the US Congress to protect investors and ensure market integrity through regulation of broker-dealers, is a case in point. FINRA writes and enforces rules governing the activities of more than 3,800 broker-dealers representing more than 600,000 brokers.
Each day the organisation oversees up to 75 billion market events, 99% of equities trades, and 65% of options trades in the US, applying data analytics to disclose any insider trading activity. FINRA shifted a key component of its IT infrastructure to Amazon Web Services, adopting AWS Lambda serverlesscomputing to make data validation more efficient.
FINRAs Order Audit Trail System (OATS) is part of an integrated audit trail of order, quote, and trade events for all National Market System stocks and over-the-counter equity securities. The organisation uses OATS to monitor the trading practices of member firms, leveraging OATS data, along with other market data, to create the lifecycle of each order and monitor the trading practices of member firms.
Broker-dealers must submit daily electronic OATS data to FINRA, amounting to more than 50,000 files. When data is received, FINRA validates it to make sure it is complete and correctly formatted based on a set of more than 200 rules. The system performs as many as half a trillion validations each day.
By using AWS Lambda, FINRA has increased cost efficiency by a factor of two, according to the organisation. That comes from only paying for what it uses and not having to manage on-premises server infrastructure.
It is been said that a move to the cloud can create IT complexity for companies by adopting different types of services and adding multiple cloud service providers.
That is true enough. But a broad move to the cloud can also add efficiencies and reduce costs when there is an effort to unify various IT components within the same cloud environment.
Coverdell, a full-service marketing company that specialises in creating and delivering customised offerings for clients, in 2018 embarked on a digital transformation as part of a strategy to adopt a new direct-to-consumer sales model.
Part of the effort involved deploying services on Microsofts Azure cloud. Moving a group of websites to the Azure App Serviceplatform-as-a-service(PaaS) enabled Coverdell to cut monthly hosting costs to less than $1,000 and significantly reduce maintenance efforts.
The cost savings and other benefits drove Coverdell to look into other Azure-based offerings to support the new customer-focused business strategy and modernise its infrastructure. The company decided to shift its core applications, data, services, and underlying on-premises infrastructure to the cloud.
The move to invest in Azure and unite its network of websites, applications, data, and infrastructure within the cloud environment resulted in greater cost savings than the company expected. It was able to eliminate $54,000 in monthly costs for colocation services.
And with a new, unified infrastructure, Coverdell expects to save an estimated $1 million over the next year or two.
For many companies, the cloud has provided a new way to offer e-commerce transactions to customers. In addition to providing easier scalability and flexibility based on fluctuating demand for capacity, moving e-commerce to the cloud also presents a way to reduce costs.
Metro, a business-to-business wholesaler and food specialist,migrated its e-commerce platform to Google Cloud Platform (GCP) and as a result can deliver more stable, scalable services for customers. The company also deployed a data lake on GCP to make customer data analysis more available inside the company, and to support integrated analytics and machine learning for new product development.
By lifting and shifting its e-commerce platform to Google Compute Engine instances and using Google Clouds Virtual Private Cloudto create integrations with the companys back-end systems, Metro reduced its infrastructure costs by 30% to 50%.
Perhaps even more welcome than these savings, the cloud migration brought significantly more stability to the e-commerce environment. Rather than having 10 virtual machines rebooting every week, the company rarely has to deal with one. Outages or periods of instability with the e-commerce platform are down by as much as 80%.
IDG News Service
Read More: cloud cloud migration data centres savings
- Edge Computing Is A Red-Hot Tech Trend, Here's How To Invest in It - TheStreet - June 27th, 2020
- Docker servers infected with DDoS malware in extremely rare attacks - ZDNet - June 27th, 2020
- Nebulon emerges with software-defined storage, but from the cloud - ComputerWeekly.com - June 27th, 2020
- Ampere's New 128-Core Altra CPU Targets Intel, AMD In The Cloud - CRN: Technology news for channel partners and solution providers - June 27th, 2020
- Cloud IT Infrastructure Spending Continued to Grow in Q1 2020 While Spending on Non-Cloud Environments Saw Double-Digit Declines, According to IDC -... - June 27th, 2020
- Empowering Edge Cloud in the 5G & IoT Hyper-Connected Era - insideHPC - June 27th, 2020
- Ampere's 128-Core Processor Challenges Intel and AMD in a Cloud-Based Processor Showdown - News - All About Circuits - June 27th, 2020
- This Ransomware Campaign is Being Orchestrated from the Cloud - Computer Business Review - June 27th, 2020
- Ad industry spots money in the cloud | Industry Trends | IBC - IBC365 - June 27th, 2020
- Want to work at Microsoft? Dice.com looks at top jobs, skills the tech giant is looking for - OnMSFT - June 27th, 2020
- The Winston-Salem Symphony Announces Newly Elected Directors - Yes! Weekly - June 27th, 2020
- The Best VPNs for Businesses and Teams - PCMag.com - June 27th, 2020
- NexTech AR Solutions tie-up with Fastly cloud platform leads to video security breakthrough - Proactive Investors USA & Canada - June 27th, 2020
- Moving to the cloud: Migrating Blazegraph to Amazon Neptune - idk.dev - June 27th, 2020
- Cloud-Based Automation Is a Reality; Now What? - Radio World - Radio World - June 27th, 2020
- How Azure, AWS, Google handle data destruction in the cloud - TechTarget - June 27th, 2020
- AMD EPYC Processor Adoption Expands with New Supercomputing and High-Performance Cloud Computing System Wins - GlobeNewswire - June 27th, 2020
- What it Means To Be Software-Defined in Retail and How We Got Here - Retail Info Systems News - June 27th, 2020
- Cloud Storage Market 2020: Challenges, Growth, Types, Applications, Revenue, Insights, Growth Analysis, Competitive Landscape, Forecast- 2025 - Cole... - June 27th, 2020
- Why This Cloud ETF Can Keep up its Torrid Pace - ETF Trends - June 20th, 2020
- FaceApp Privacy: What You Need To Know About The Viral Russian App - Forbes - June 20th, 2020
- Cloud flash storage: SSD options from AWS, Azure and GCP - ComputerWeekly.com - June 20th, 2020
- Could the European Cloud Deliver Data Protection by Default? - CPO Magazine - June 20th, 2020
- Private Cloud Server Market How the Business Will Grow in 2026? - Cole of Duty - June 20th, 2020
- How to Profit from the Growing Divide in Tech Stocks. - Barron's - June 20th, 2020
- Cloud Computing in Education Sector Market Size, Growth, Analysis, Outlook by 2019 Trends, Opportunities and Forecast to 2025 - Medic Insider - June 20th, 2020
- Lenovo announces ThinkSystem SR860 V2 and SR850 V2 servers - Gadgets Now - June 20th, 2020
- Here are 8 career options that are least impacted by recessions - Business Standard - June 20th, 2020
- Everything your business needs to know about VPS - Tom's Guide - June 20th, 2020
- Global Cloud Based Collaboration Software Market : Industry Analysis and Forecast (2020-2027) - WorldsTrend - June 20th, 2020
- AWS claims to have blocked the largest DDoS attack in history - Cloud Pro - June 20th, 2020
- Cloud Office Migration Tool Market to Grow at Robust 17.8% CAGR to 2027 AvePoint, Binarytree, BitTitan, CodeTwo sp. z oo sp. k - Personal Injury... - June 20th, 2020
- Healthcare Cloud Computing Market to Witness Robust Expansion by 2025 - 3rd Watch News - June 20th, 2020
- Renowned French Cloud, storage, computing and AI solution providers Actualis, has today formally rebranded to become part of the Boston Group of... - June 20th, 2020
- Startups, here's what you should know about telcos - CTech - June 18th, 2020
- US buildings firm saves big on HDDs with Nasuni cloud NAS - ComputerWeekly.com - June 18th, 2020
- Uptycs Announces $30 Million in Funding to Deliver Next-Generation Security Analytics - AiThority - June 18th, 2020
- Keeping Your Cloud-based Office Safe And Secure - ISBuzz News - June 18th, 2020
- Pensando positioned as high-performance alternative to cloud provider 'lock-in' - SiliconANGLE - June 18th, 2020
- How M&E organisations can enable remote work with cloud-based video and animation production studios - ITProPortal - June 18th, 2020
- Ampere donates Arm64 server hardware to Debian to fortify the Arm ecosystem - Stockhouse - June 18th, 2020
- Kia Motors partners with Google Cloud to develop AI-based owner's manual app - Automotive World - June 18th, 2020
- Function-as-a-Service Market Recent Trends, Development, Growth and Forecast 2017-2025 - 3rd Watch News - June 18th, 2020
- How Lenovo, Cellnex, Nearby Computing Are Delivering on the Edge - eWeek - June 18th, 2020
- Dell Technologies Shifts AI Adoption into the Fast Lane with Simplified Advanced Computing - CXOToday.com - June 18th, 2020
- AWS mitigated a record-breaking 2.3 Tbps DDoS attack in February - SiliconANGLE - June 18th, 2020
- Deluxe Revolutionizes Distribution of Content to Theaters with Cloud-Based IP Delivery Solution through Deluxe One Platform - HostReview.com - June 18th, 2020
- Report: France and Germany team up on a cloud-computing ecosystem to take on Amazon, Microsoft and Google - FierceTelecom - June 6th, 2020
- Dive into the history of server hardware - TechTarget - June 6th, 2020
- COVID-19 Impact ON Private Cloud Server Market : What is the projected sales growth for 2026? - Cole of Duty - June 6th, 2020
- NextCloud gets bigger and better with Nextcloud Hub 19 - ZDNet - June 6th, 2020
- Micron Has the Potential to Rise 50% From Here - TheStreet - June 6th, 2020
- Kofax Partners with Microsoft to Enhance Cloud-Based Universal Print Solution with ControlSuite - Industry Analysts Inc - June 6th, 2020
- Dell and Intel answer the call for AI by building specific solutions for real problems - SiliconANGLE - June 6th, 2020
- Data Protection As A Service Market Projection of Each Major Segment over the Forecast Period - Cole of Duty - June 6th, 2020
- PAM as a Service: Its All a Matter of Trust - Security Boulevard - June 2nd, 2020
- How To Best Adapt Your Business When The World Is Moving Online - Forbes - June 2nd, 2020
- Cloud computing via satellite to drive 52 Exabytes of traffic by 2029: NSR - SatelliteProME.com - June 2nd, 2020
- Multinational Insurance Company Completes Upgrade of Majesco Policy for P&C from On-Premise to Majesco CloudInsurer to Bolster Growth Strategy -... - June 2nd, 2020
- COVID-19 Impact on Healthcare Cloud Computing Market Marked US$ 13 Bn in forecast Years 2025 - 3rd Watch News - June 2nd, 2020
- Cloud computing, future trends to be followed in the industry - Optocrypto - June 2nd, 2020
- You couldn't do this already? AWS adds size and bandwidth growth to FSx for Windows File Server - Blocks and Files - June 2nd, 2020
- Upstream Security Partners With Amazon Web Services to Enhance Automotive Cybersecurity - PRNewswire - June 2nd, 2020
- Improvements on the verify domain error in Office 365 - TechGenix - June 2nd, 2020
- Digital transformation held back by lack of skilled people - ComputerWeekly.com - June 2nd, 2020
- NTT Com internal cloud server hacked, information on 621 customers stolen - DatacenterDynamics - June 2nd, 2020
- Where is the edge in edge computing? And who gets to decide? - ZDNet - June 2nd, 2020
- Cloud-native architectures will define the vRAN future - 5Gradar - June 2nd, 2020
- Developers recall career 'aha' moments that have shaped their Docker experience - SiliconANGLE News - June 2nd, 2020
- HSBC platform uses AI to analyse trading data thousands of times faster - ComputerWeekly.com - June 2nd, 2020
- CloudBolt Releases Version 9.3 of Its Award-Winning Cloud Management Platform - Container Journal - May 31st, 2020
- Kaminario offers cut-price virtual SAN in the cloud - ComputerWeekly.com - May 31st, 2020
- 4 types of mobile security models and how they work - TechTarget - May 31st, 2020
- Increased cybersecurity for the transportation industry - Commercial Carrier Journal - May 31st, 2020
- Cloud-Based Firewalls Are Key to Protecting Employees While Working Remotely - Security Boulevard - May 31st, 2020
- Cloud storage 101: File, block and object storage in the cloud - ComputerWeekly.com - May 31st, 2020
- Cloud Transition During the COVID-19 Exposing the Enterprise Vulnerabilities - EnterpriseTalk - May 31st, 2020
- The Role of Artificial Intelligence in Ethical Hacking | EC-Council Official Blog - EC-Council Blog - May 31st, 2020
- Shelves are well-stocked with cloud-native tools, but simplicity remains a moving target - SiliconANGLE - May 31st, 2020
- Uncover and overcome cloud threat hunting obstacles - TechTarget - May 26th, 2020