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Investing in new hardware? Look to the cloud

Many businesses have not made the move to cloud because they are loath to let go of their existing investments in on-premises infrastructure, says Richard Vester, Director of Cloud Services at EOH.

Johannesburg, 22 Apr 2015

For many years, IT shops have worked off the premise that if it ain't broke, there's no reason to fix it. As a result, these technology departments wait for new technologies and methodologies to become widely deployed before they adopt them.

However, many IT departments have not yet made the move to cloud computing - which has become widely implemented - for a different reason: the perceived costs of changing from an on-premises infrastructure to cloud. "Companies have spent many years buying tin, and the investment versus ROI debate was put to bed long ago. While cloud is known to be an extremely cost-effective solution, businesses are loath to let go of their existing investments," says Richard Vester, Director of Cloud Services at EOH.

He adds that all of the benefits offered by cloud, including the fact that it negates the need for expensive on-premises infrastructure and skilled resources, become a cost concern when CIOs evaluate a move to the cloud in comparison to adding to their existing technology stacks.

"Deploying and managing their own infrastructure has become an art for many IT departments. And because budgets are created and controlled in advance, many do not realise how inefficient these investments are when they could simply be wrapped up in a convenient monthly fee. With on-premises deployments, companies have to plan for maintenance and make provision for upgrades when the technology reaches the end of its useable life. They also have to worry about management, performance and security. All of these things are administered by the cloud provider, and managed through service level agreements to ensure that deployment is quick and easy, and meets the exact needs of the business."

In addition to the fast deployment times offered by the cloud, it provides access to the latest hardware without the need for expensive Capex purchases. However, Vester says while these are often the deciding factors for companies moving to the cloud, IT overlooks other areas of investment that the cloud can provide cost savings around.

"Many companies do not think about the fact that the purchase of hardware involves additional outlay on things like licences. Software setup fees and licensing costs can become extremely expensive in a large organisation, and having to pay for hundreds of licences upfront is a large investment that is seen as a necessary expenditure. The economies of scale that cloud providers have applies to licence costs as much as to hardware costs, resulting in massive savings for larger businesses," Vester says.

In addition, the scalability offered by cloud applies equally across the technology stack. Organisations work with their peak load criteria when planning their infrastructure requirements, resulting in idle hardware and unused software and applications for periods of time. Through the flexibility of its pay-per-use model, cloud computing negates the need for wasted technology while guaranteeing availability at all times.

"Cloud computing is a utility model, meaning that while the monthly fee may seem to work out to slightly higher in a direct comparison to the once-off expenditure for on-premises hardware investments, the overall cost is reduced. This is not only as a result of the efficiencies of only paying for what you use, when you use it, but also because expensive upgrades and things like licence fees are integrated into the service fee. In a one-to-one comparison, cloud offers much higher ROI and value," Vester concludes.

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EOH

EOH is one of the largest technology and knowledge services provider in South Africa and provides the technology, knowledge, skills and organisational ability critical to Africa's development and growth. EOH's 6 000 staff members deliver end-to-end enterprise applications solutions, a wide range of Outsourcing, Cloud, Managed Services and Business service offerings to customers across all major industries.

EOH has been listed on the JSE Limited ("JSE") since 1998, for more information visit: www.eohcloud.co.za

Editorial contacts

Mia Andric
Exposure
mia@exposureunlimited.net