Will Cloud Computing Lead to a Decrease in IT expenditure?

By the end of 2013, it is predicted that global IT expenditures between enterprises and governments will spend $2.06 trillion on software, hardware, and IT services including servers, application outsourcing, and hosting. But for 2014 and beyond, will spending all this money on IT expenditure end up being worth it in the long term? Cloud computing is becoming more important to technology and storing data than ever before. From saving data at home or work to hosting online websites, will this be a new way for us to develop technology and save money?

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Why decrease IT expenditures?

Coming out of the recession, organizations have focused on spending their budget on upgrades in their IT sector to compete with other organizations. It’s suggested that companies in general tend to spend about 3-7% of their revenue on their IT and small to medium size businesses were spending the most compared to larger businesses in order to try to catch up. Of course consistent technology updates are necessary for any business, but perhaps most businesses are looking at spending too much, too soon. Rather than focus on growing all at once, perhaps small businesses should focus on other means of growing their business through outsourcing opportunities such as cloud computing.

Expanding IT and saving money with cloud computing

With cloud computing outsources, it won’t take too much to grow a company’s IT department and expand their business. Instead of purchasing physical data storage units, everything that has been documented can be saved in a cloud database. Rather than capital expenditure, most cloud services are pay as you go and it’s easy to predict future expenses.

For online vendor businesses, PCI cloud computing software is ideal to insure that their customer’s credit card information is saved and secure from online hackers. In compliance with the PCI DSS regulations, you may need someone to review your system to make sure you have the necessary security systems such as a firewall and anti-virus software as well. Depending on which plan you sign up for and who your service provider is, the anti-virus software may be included or cost you extra money. On the other, it’s extremely important that your PCI is consistently scanned to catch any bugs in the system.

Additional spending and performance concerns

Even though cloud computing systems can save you money in the long end, again, you will still have to face different maintenance costs besides software including:

  • Hardware
  • Operations
  • Administration
  • Technical support
  • Labor costs accounting

The technology upgrades that you spend now (such as a new computer for each worker) can increase significantly as new updates are needed over time. Cloud computing can save you space and money, but you will still need to be spending the budget money on important factors such as these additional items and services to ensure that your system is working properly.

Despite all the money IT departments cans save while they grow with cloud computing services, CIOs and IT managers do have concerns about hidden costs of cloud services. Many are still skeptical about its availability and performance; potential bottlenecks because their employees are unfamiliar with the system; and if the poor performance will affect their brand’s image to customers.

Each year, more and more businesses are turning to cloud computing as a means of growing their IT department while overall spending less on IT expenditure. Already, 81% of CIOs use or plan to use cloud computing services within the next 6 months. 73% of companies still use outdated methods, but by 2016, IT departments will continue to be more dependent on incorporating cloud computing systems into the business’ organization.

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Writer Biography This is a guest post by Lindsey Mcmahon. She likes to travel, play and read in her free time. Her main interests are tech, business and health, but she is constantly extending her field of view to incorporate interesting news suggested to her by her readers. If you like her articles, make sure to follow her on Web Design at her Company's website.

One Response to “Will Cloud Computing Lead to a Decrease in IT expenditure?”

  1. TechCrates

    Jan 05. 2014

    The cloud makes servers and websites affordable to people 🙂

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