Is the Cloud the most inexpensive method of procuring and using IT services? It is argued that the Cloud is not the most inexpensive model. The contention is that, if you look below the surface, the expenses add up to a large number!  They argue that the Cloud converts the head of accounting from CAPEX to OPEX and this creates the illusion that the Cloud is inexpensive. If all the outflows from the “subscribe and use” model are capitalized for the life of the asset use and compared with the “buy and use” model, the decision will be heavily in favor of the latter.

However, there are gaps in the defense. The numbers are misleading. The argument fails on the ground that the “same asset” is not being used!  So, what “life of the asset” is being talked about? There is no timeframe that needs to be taken into account as there is not fixed time frame either. Information technology is changing very rapidly. Hardware is continuously improved and newer technologies are hitting the market faster than ever before.

Since Cloud backup service providers are in the business of providing the latest technology to their subscribers, the hardware and software is continuously upgraded with the business needs of the end customer in view. The Cloud opens up an alternate path and offers up a different solution. Organizations do not have to spend their time and energy upgrading their hardware or software. Latest technological hardware and software resources are instantly available on subscription. They are constantly upgraded with little or no effort or expense on the part of the subscriber.

It is clear that a several factors are not being taken into consideration while arriving at the numbers in support of the “buy and use” model!  The case for the Cloud vis-à-vis the buy and use model will have to be made more defensible.  The cost of procurement will have to be upped for every upgrade of hardware or software that is made.  Associated costs in terms of time or manpower resources for procurement, installation and troubleshooting will have to be included.  All this will add up a very large number, and you may find that it far more than the cost of subscribing to the Cloud!

Interested to find out if the Cloud is the most inexpensive avenue for your enterprise? Let Securstore help you make the right decision. Why not contact Securstore for a free, no obligation consultation?