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Additional Cost Savings

Of course, cloud computing can provide cost savings to an organization in other ways. Let's look at a few:

  • Lower PC costs. Cloud computing lets an organization reduce its budget for desktop PCs. You don't need a high-powered (and accordingly high-priced) computer to run cloud computing's web-based applications. Because the application runs in the cloud, not on the desktop PC, that desktop PC doesn't need the processing power or hard disk space demanded by traditional desktop software. Hence, the client computers in cloud computing operations can be less expensive, with smaller hard disks, less memory, more efficient processors, and the like. In fact, a client computer in this scenario wouldn't even need a CD or DVD drive, because no software programs have to be loaded and no document files need to be saved.
  • Lower maintenance costs. Cloud computing greatly reduces both hardware and software maintenance for organizations of all sizes. With less need for hardware (fewer servers) in the organization, maintenance costs are lowered immediately. This rule also applies to software maintenance; since all cloud apps are based elsewhere, the organization's computers don't have software for the IT staff to maintain. It's that simple.
  • Lower software costs. Instead of purchasing separate software packages for each computer, the organization only needs to provide access to an application in the cloud for those employees who actually use it. Even if web-based applications cost the same amount to operate as similar desktop software (which probably isn't the case), IT staffs are saved the cost of installing and maintaining those programs on every desktop in the organization. And, since early indications are that cloud services will be priced substantially lower than similar desktop software, a company's initial software investment should be lower with cloud computing than with traditional desktop software. In fact, many companies (such as Google) offer their web-based applications for free—which, to organizations both large and small, is much more attractive than the high costs charged by Microsoft and similar desktop software suppliers.

The bottom line is that cloud computing should reduce costs across the board for IT departments. After offloading application and data storage, as well as all hardware support, an IT department simply has less work to do. Fewer internal resources mean fewer internal expenses—and a significant reduction in IT department costs.

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