Will Cloud Computing Really Cut Costs?

It's being sold as one of the key advantages of cloud computing. But is there really money to be saved, wonders Simon Brew?

As Ovum analyst Laurent Lachal told us when we asked whether he thought cloud computing could save organisations money, "it depends". And it depends on a series of factors, from the cloud solution that's deployed, to the manner in which it's utilised.

The ideal result, and it's a feasible one, is that cloud computing can result in a more efficient way of working and can bring in economies. But it's not a simple menu of choices sitting in front of those considering adopting the cloud.

It's not necessarily because of the complexity of getting a solution set-up, more that real and solid thought needs to be put into what's required before a solution is chosen. Common sense, perhaps, but nonetheless not always adhered to.

Furthermore, Ovum also noted in the key messages of its extensive report that "public cloud costings evolve, not always as expected or for the better," and at one stage it points towards a "pay as you grow" approach.

While, therefore, the cost of physical software is negated by a cloud approach, there's still a level of spending, which varies depending on what mix and scale of private and public cloud solution is deployed.

There's not necessarily a one-model-fits-all answer here (there's an abundance of different routes that can be taken, after all), and nor is their a guaranteed economic benefit to following the cloud route. Yet there are benefits beyond the balance sheet, and, in truth, a carefully-managed cloud project can yield both productivity increases and budget savings.

Approached with just one of those criteria in mind, and the cloud may just be a tougher sell. But with both? That's where the current benefits of cloud computing arguably lie.

So ultimately, yes, cloud computing can save money. But, as Ovum notes, "the lure of cost savings usually turns out to be a triumph of hope over experience."

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