Benefits of Cloud Computing

**4. Benefits of Cloud Computing**

There are a variety of benefits listed in the literature
for organizations incorporating or migrating to cloud services.  ChangeWave Alliance released a report on
March 3, 2015 showing cloud trends in corporate computing.  As a division of The 451 Group, ChangeWave
Alliance is a technology industry analyst company that focuses on the business
of enterprise IT innovation.   The graph
below shows some of the considerations taken when making a business case for
migrating to cloud computing.  Some of
the key benefits will be discussed.

**4.1 Cost Savings**

Cost savings encompass a variety of topics with regard to a business’s use of cloud computing.  As is mentioned frequently in the literature, there is little to no up-front capital investment in having to buy servers or building and floor space for datacenter when using cloud services.  Also, there is little electricity costs as well as no cooling costs for systems.  Companies can start with little up-front capital by starting small and as their business grows can invest in the increase of hardware resources.  Because companies do not have to maintain their own datacenter, there is a reduction in the cost of services.  These cost may include IT services or staff services not invested due to the use of cloud computing [5,10]

Business servers use approximately 10% to 30% of their available computing powers, while less than 5% is the average capacity utilization of desktops, per survey of corporate data centers.  Therefore, paying for the use of computing resources on short-term basis as needed may greatly lower the cost of IT for firms.

Another advantage is not needing to pay for software licensing fees because of the universal access to software (SaaS) which can bring financial benefit.  An additional strain on corporate resources which may be alleviated using cloud computing is the management of technology found in service costs and maintenance [9].  Businesses are also able to eliminate up-front costs for computational and analytical tools that can be accessed and scaled rapidly [5,9].

**4.2 Time to Market**

Cloud computing may aid business’ to react more quickly to market conditions by allowing companies to complete a work much faster from what their datacenter permits [10].  Time to Market is defined as the amount of time it takes from a product being conceived until it is available for sale.  Getting the computer resources that are needed tends to shorten IT projects which results in faster and more predictive time-to-market.  There are many advantages to faster time to market such as the ability of the business to have the entire market share, enabling them to charge a premium.  Also, time to market enhancement by cloud computing improves a company’s innovative and technological image.

**4.3 Less to Manage Internally and Time Value**

One of the functions of an internal IT department is to make available to end users IT resources which are a very time-intensive and expensive process for companies.  Using modern computing techniques such as cloud computing allows for more efficiency through highly scalable software and hardware resources [1].  Employing traditional data center management practices becomes very time-intensive as well as expensive.  Time savings can include building floor space, software to be run on the service, purchasing hardware and provisioning the network and securing back up power which can all be incorporated in cloud computing.  Companies can better focus on core competencies like improved productivity and business practices using cloud computing as a time value service.  Instead of being confined to their desks, employees can be productive from wherever, another benefit of time value.

**4.4 Scalability, Flexibility and Customer Satisfaction**

The goal of cloud computing is minimal service provider interaction for customer load while dynamically scaling resources up or down through software APIs.   A cost benefit is realized as companies pay for actual usage when scaling up or ramping down the capacity on demand.  The ability to add or remove resources with a lead time of minutes rather than weeks or months is an important aspect of scalability [7,10].  Scalability also permits for matching of resources to workload much more closely due to the pay-per-use basis and therefore the extra resources used are automatically commissioned alleviating cost of paying for spikes and peaks in service.

Flexibility in cloud computing gives the ability to innovate, experiment and explore with better means such as better platforms and application tools in a quick and cost-effective way.  This permits the company to come up with better services and solutions.  Flexibility also aids in non-uniform cloud computing services to be purchased within time, in the networking community [2].

Customer satisfaction is a high priority in any business.  The quantification of benefits of cloud computing increases the level of customer satisfaction not the increase achieved.

**4.5 New Classes of Applications, Green IT, Third-World Countries**

New applications have resulted from cloud computing.  Business analytics that use vast amount of computer resources to understand customers, supply chains and buying habits can be undertaken.  Mobile interactive applications that respond in real time to information provided by users are now available.  Batch processing for relatively small periods of time can be done, taking advantage of huge amounts of processing power.  Such applications as mashups, which are web pages of applications that combines data of functionality from two or more external sources to be used in unintended way are possible [13].

Efforts that help save valuable natural resources is a perk in cloud computing and may aid businesses in getting a Green IT Tag.  Green IT improves the image of a company and makes a company more likely to be favored.  These initiatives reduce a company’s carbon footprint, help improve customer loyalty, increase customer retention as well as customer acquisition and heighten customer satisfaction.

Educational opportunities to third-world countries that have been left behind the IT revolution now exist with cloud computing [11].