How to Budget for Cloud Computing Services

August 12, 2015 3 min Read

Budgeting for Cloud Services

The trend to migrate to cloud computing continues to grow. Most likely, your company is somewhere in the midst of its migration plan or about to begin one. Budget for cloud computing costs now as your enterprise continues to migrate its IT infrastructure to a solely cloud-based platform.

A Goldman Sachs study published in January estimates that spending on cloud computing infrastructure and platforms will grow at a 30% CAGR from 2013 through 2018. And all consultancies and research firms agree that the adoption of cloud computing on a global scale is accelerating, so it is important to understand how budgeting is affected.

Traditionally, and still in many organizations, oftentimes the process of budgeting capital expenses for additional hardware is reactive rather than planned. With cloud computing, you will incur recurring operational expenses, in most cases consistent monthly charges. This is very helpful in the budgeting process. The different services that you use each month from your cloud provider can also be broken down into line items on different departments’ budgets.

To correctly budget prior to implementation or before a full migration, you will need to contact your chosen hosting provider to get an accurate quote. To do that, you will need to know exactly what you will be migrating and when. Will you move all at once or gradually transfer applications over to the cloud? You will also need to know the technical requirements for the setup of this environment so it’s best to engage your IT engineers in the budgeting process as well.

Knowing the monthly costs, after the larger initial setup costs, helps you to budget your IT spend. It also helps to free up additional capital for hardware upgrades as needed and product development. One blogger estimates that the savings incurred by migrating to the cloud could be as great as 70% over a 10-year period. Beyond even the capital spend, when companies move to the cloud the can reallocate the hundreds or thousands of hours they spend every few years refreshing their hardware. Most teams evaluate multiple vendors, write justifications on why new hardware is needed, plan a change control, migrate their applications and finally securely dispose of their old hardware. All of these activities provide no value creation for a company; this time is spent just keeping the lights on while introducing significant risks.

Expedient has a cloud computing calculator available on its website to help get an idea of the initial and monthly costs of cloud computing. They can also assist in setting a migration plan and help to implement a working budget for your enterprise. Check out the calculator here and learn more about all of Expedient’s available cloud computing options here.

David Saliba David Saliba

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