Traditional model of on premise IT infrastructure helped enterprises maintain their data in close proximity for better security and privacy. There cannot be any doubt about the fact that on premise model offered assured security of business critical data. However there is an extremely high CapEx attached with this arrangement since the enterprises ended up spending heavily for purchasing costly hardware equipment in addition to cost of space.
Evaluating CapEx model of IT infrastructure
Apart from the capital expenditure, on premise IT infrastructure needs to ensure seamless availability of power, cooling, and technical staff to look after smooth running of the facility. Enterprises need to make sure that the systems are upgraded frequently. CapEx model is influenced by extremely high upfront costs and a constantly depreciating hardware.
All parameters of CapEx make the model a high cost intensive alternative and therefore it is quite logical that many enterprises are either planning or have already moved to cloud computing environments that not only promise security of sensitive data but also assure elimination capital expenditure.
There has been a considerable shift from defensive attitude of cloud hosting providers towards security of data in cloud to a more aggressive and convincing approach that is governed by cloud environments that are protected, encrypted, and fully redundant.
Cloud adoption and features of OpEx models
Enterprises are now adopting cloud computing with confidence of their data being protected against malicious attacks and other cyber threats. This has helped entrepreneurs adopt cost effective cloud capabilities to gain a competitive edge and agility for business growth.
Cloud based solutions promote flexibility to help employees find innovative and efficient ways to communicate with each other. There is a significant reduction of capital expenditure in cloud based solutions. OpEx model of cloud is also useful for reduced initial investment and mitigate conventional CapEx related costs.
Remote facility of data center outsourcing empowers business customers with seamless connectivity and redundant storage. Cloud service provider also shoulders responsibility of operating and maintaining the entire infrastructure by looking after ongoing costs of power, cooling, and connectivity.
Therefore organizations are only required to include probable costs of availing services instead of paying for every aspect individually. The service costs for cloud solutions also include staff payments and costs of software and hardware upgrades. SMBs can benefit from pay as you go model because the small organizations may not be able to have dedicated IT teams to look after data center operations.
Decision to adopt OpEx model may free up funds that were allocated for hardware purchases in CapEx environment and these funds can be channelized for more effective use such as development initiatives.
Moving software capabilities to cloud
CapEx is mainly related to hardware infrastructure. Along with migration of hardware resources to cloud for deriving benefits of OpEx, one can also move software to cloud for following distinct advantages.
Reduce Total Cost of Ownership- On premise software solutions need servers to be upgraded on regular basis to comply with new versions, which can consume considerable expenses and efforts in addition to frequent downtime events. In contrast, cloud based software applications are automatically updated and are supported by fully managed cloud ecosystem. These applications are also environment friendly apart from being cost effective and user friendly.
Business protection and compliance- More and more stringent regulatory requirements are being imposed on many industries. Achieving regulatory compliance in on-premise infrastructure can be a highly complex process. Therefore many enterprises prefer to adopt cloud based solutions to protect data from threats of breach or hacking attempts. In addition remote cloud backups with encryption facilities and end to end security facilitate regulatory compliance.
Flexible and secured access- Cloud adoption frees users from hassles of looking after enterprise IT infrastructure needs by taking care of licensing, security patching and daily updates. This can effectively improve ability of enterprise and its staff to focus of core business capabilities. Businesses can effectively focus on customers, new product development and other priorities.
Trustworthy business continuity- Cloud computing is known to offer robust capability of business continuity to restore vital business functions by assured data protection in the event of unplanned outage. Thanks to industry specific cloud applications that are routinely backed up, you can always access your data from anywhere and at anytime. Data accessibility is not hampered in spite of any downtime.
Contemporary cloud service providers have acquired better than ever capabilities to offer secure and high performance solutions to help businesses shift from their traditional on premise IT infrastructure with far greater confidence than ever.
No wonder, enterprises prefer to adopt OpEx based IT solutions to on premise infrastructure since there is far less upfront investment and negligible maintenance and operating costs.
Cloud market is on the way to maturity due to support from cloud service providers that are offering innovative solutions to enable cloud adoption in more and more organizations.
interesting topic: How can I move a small business server to the cloud?