In the last few years, SMB IT spending grew slowly while the scope of IT operations expanded rapidly. In 2017, SMBs spent $574 billion on IT. IDC projects IT spending will reach $684 billion by next year, an increase of less than 20 percent in four years. Over the same period, the push to ever greater digitization accelerated. Businesses expect IT professionals to do more with less, fostering a need for increased cost-efficiency.
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How have small and medium businesses managed to stretch IT budgets so far? In part, the answer is cloud hosting and the cost and operational efficiencies made possible by the cloud.
Cost-efficiency is always a key consideration for SMBs that move away from on-premises or colocated infrastructure and into the cloud. In this article, we look at some of the ways Infrastructure-as-a-Service (IaaS) cloud platforms increase the ROI of IT spend. We’ll also look at some of the challenges that can lead to overspending in the cloud.
On-Demand Cloud Servers That Scale
Cloud servers are on-demand infrastructure. Unlike the capital investments or long leases of physical servers, you can provision cloud servers when you need them and discard them when you don’t, whether that’s for an hour, a day, or several years.
There is no upfront commitment: you pay for cloud servers after you have used their resources. With physical servers, you have to predict traffic and load in advance, paying for resources you may or may not need. Predicting resource requirements is notoriously difficult, and often leads to overspending and underutilization.
With cloud hosting, businesses can trim unused resources and reduce the server’s cost. A cloud server’s capabilities can be calibrated to meet changing needs. It is simple to scale a server’s resources when you need more—or less—storage, memory, or processing power.
All of this means that cloud server spending accurately tracks the needs of your business. Cloud servers scale as your business scales, substantially reducing wasted IT dollars.
Reduced Infrastructure Management Costs
SMBs that host applications on cloud servers outsource the management of the physical infrastructure to the cloud vendor. The vendor takes care of the network, the physical servers, and the host server’s software. We are responsible for repairs and replacements. We respond to hardware failures and outages. And we design and implement a platform that provides the performance, availability, and security promised to our customers.
You might be thinking that we pass the cost of managing the physical layer on to the customer, and you’d be partly right. But cloud vendors like ServerMania operate at a much bigger scale than most SMEs. We leverage economies of scale, automation, and technical expertise that are not available to smaller businesses, and we pass those savings on to our customers.
Consider a situation in which your business has a big product launch that needs IT infrastructure to support it. How long would it take you to provision a fleet of physical servers, place them in a data center, and install the necessary software? For many SMEs, the best case is days and the worst case is months.
With Infrastructure-as-a-Service, you can provision a fleet of servers in minutes with no operational or financial risk. Infrastructure agility allows businesses to experiment, to implement efficient processes such as continuous integration and deployment, and to bring products to market faster.
The cloud helps businesses to reduce infrastructure spending and increase the speed and efficiency of business operations, both of which contribute to optimized IT infrastructure ROI.
Cloud servers can be automated. The ServerMania Cloud offers a comprehensive API that can be used to automate server provisioning and various other infrastructure management tasks. Automation has several cost-saving benefits:
- Common tasks can be scripted, freeing employees to focus on tasks that generate value for your business.
- As with infrastructure agility, automation allows businesses to react quickly to infrastructure demands.
- Automation eliminates many expensive manual errors.
- Automation and server templates allow businesses to create and enforce cost-efficient infrastructure provisioning and scaling policies.
Automation is an advanced cloud feature, and you can make significant infrastructure cost saving without cloud automation. But, for businesses that want to take full advantage of the operational capabilities and cost efficiencies of cloud computing, automation is a useful and flexible tool.
Cloud Cost Optimization Challenges
In this article, we have looked at several cloud features that help SMEs to save money. However, taking full advantage of the cost-efficiencies of the cloud can be challenging.
Seventy-three percent of businesses named cloud cost optimization as their top infrastructure initiative for 2020. They feel that they are not making the most of the cost-optimization potential of their cloud platform. The Flexera 2020 State of the Cloud Report reflects that anxiety, estimating that 30 percent of cloud spend is wasted.
At ServerMania, we want to help users of the ServerMania Cloud to spend IT budgets as efficiently as possible. That’s why our pricing is transparent and easy to understand. It’s why we’re dedicated to keeping cloud costs as low as possible.
And it’s why we wrote Cloud Cost Management: Bring Your Company’s Cloud Spending Under Control, a white paper covering cloud cost management strategies in-depth. The white paper covers:
- Cloud spending audits and how to build a cloud cost management plan based on the information surfaced in an audit.
- Rightsizing servers and storage.
- Techniques for eliminating underutilized infrastructure.
- Rearchitecting applications to make the most of the cloud.
Cloud Cost Management: Bring Your Company’s Cloud Spending Under Control is a free download and a must-read for SMBs looking to optimize infrastructure spending in the cloud.
To learn more about how the ServerMania Cloud can help your business to reduce IT infrastructure spending, contact a cloud hosting specialist today for a free initial consultation.