Until the beginning of this decade, IT infrastructures were becoming complex and costly. Companies were constantly investing in applications, servers and databases to be able to support the growing demand from users. And as their infrastructures expanded, they began to realize that managing countless hardware and software was becoming too cumbersome and cumbersome.

And the more complex this management became, the longer the IT team took to perform it. As a result, the cost of operations rose and there was no time for employees to innovate. Not to mention the high TCO (Total Cost of Ownership) resulting from investments to acquire infrastructure and recurring expenses to keep them fully operational.

In this post, we will explain how cloud computing manages to reduce the TCO of today's companies and increase the return on their investments. Look:

IT Spending That Raises TCO

When imagining a local data center, many managers soon think of a physical infrastructure, composed of various hardware and software. To buy these assets, the company needs to invest a significant amount of financial resources. The value is so high that the leaders of SMEs (Small and Medium Enterprises) get scared, and give up on many plans involving greater computing power.

But the values ​​of investments in hardware and software are not the only ones to be taken into account. The data center needs to be installed in an appropriate and reserved place in the company, which entails expenses with installations and building renovations. And to function correctly and continuously, the infrastructure needs electric power generators and also a dedicated cooling system.

IT managers must also be concerned with data center security, installing cameras, sensors and access controls inside and outside the environment. Finally, the company needs to hire a team of IT professionals to control and manage all operations. There are also other items to be purchased such as server hacks, network cables, switches, among many others.

As you can see, building and maintaining an IT infrastructure is very expensive. All of these costs dramatically raise the TCO and reduce the ROI (Return On Investment) of IT investments. Even large Fortune 50 companies, which have much more cash on hand than SMEs, do not find these costs viable, and are already looking for ways to eliminate them.

How the cloud manages to eliminate them

The cloud is the best solution found by small, medium and large organizations to eliminate the costs generated by an on-premises data center. With this technology, they are able to purchase and use an infrastructure on demand, and pay only for the computing power and storage they use. This eliminates all of the aforementioned IT costs that reduce ROI and increase TCO.

In this way, more financial resources return to the business cash, and its managers can use them to innovate more, take advantage of new opportunities and gain important positions in the market. And as the biggest cloud computing providers continue to reduce the price of their services, the TCO of organizations tends to reduce even more, which is very beneficial for their budgets.

Calculating the TCO of cloud and on-premises infrastructure

Several managers and professionals who want to measure the TCO of both the cloud and the local infrastructure, and then compare them, say that this is too complicated. In fact, comparing the TCO of the two solutions is quite difficult, as it involves numerous aspects. A very simple and efficient way to make this comparison is using a reliable TCO calculator, created together with the big players.

See too:

TCO – Do you know how much the infrastructure hosted in your company costs?
3 essential tips to reduce costs with cloud computing

This tool can help managers compare the costs of a local data center with those of cloud computing. It provides an estimate of spending through detailed reports based on information entered in the fields. For those managers who still distrust the power of cloud computing, the results shown by this calculator are a great way for them to change their minds and 'embrace' this technology.

Did you see how much the cloud can reduce your company's TCO? Now talk to our experts and request a TCO calculation to better assess costs.

Written by

Sky.One Team

This content was produced by SkyOne's team of cloud and digital transformation experts.