CIO Symmetry

Aug 12 2011   3:50PM GMT

IT cost reduction strategies: Can cloud computing help?

Wendy Schuchart Wendy Schuchart Profile: Wendy Schuchart

Ah, yes, these are the heady days of Q3, which means that it’s time to start working on your 2012 budget. Is your IT department feeling like a panhandler these days?

CIOs today are certainly no strangers to tough economic times and working up IT cost reduction strategies, but when the economy doesn’t seem to be getting any better, and as they wait out the possibility of a double-dip recession, CIOs are finding themselves at the end of their technological rope. Delayed buying decisions have left them with geriatric server, storage and networking infrastructure that is no longer nice to replace but necessary to replace. But with every pundit in the universe screaming about cloud computing — and when you’re working with a budget as dry as the Sahara after six years without rain — how do you justify new capital expenses to the business?

If we lift our heads above the noise, confusion and discomfort of economic austerity, IT infrastructure investment can be a good dollar-and-cents move you can easily justify to the business.

Cloud computing is often presented as a sort of panacea when it comes to IT cost reduction strategies and eliminating IT complexities. There are IT cost reduction strategies that involve moving to the cloud that will save on capital expenses and maybe even improve reliability and remote access. For midmarket companies, email infrastructure can be handed off to a cloud/Software as a Service provider. Lots of companies offer Microsoft Exchange, Lotus Notes or more generic Web-based mail and calendaring, and our old pal Google even offers Gmail as a service for businesses. These services often have highly redundant infrastructure to protect your data and offer better access for remote users and branch offices. They come bundled with security and spam filtering as well, further reducing infrastructure needs in the data center.

Life without spam — doesn’t that sound like a dream come true? I read recently that as much as half of any company’s bandwidth is consumed by spam. It’s like the gift that keeps on giving.

But as with most things, moving services to the cloud has its complexities. One argument against shipping off crucial IT services is whether we aren’t also eliminating the need for IT roles in the future. Of course, there are many IT functions that simply cannot be shipped off to the cloud. In-house applications, sensitive data and low-latency applications must stay in the company data center, as should the ownership of the technological advances developed by the company.

Don’t buy into the fear and panic, folks — we live in the most technologically advancing time in world history, and CIOs are at the wheel driving the change.

Even if you wouldn’t know it by looking at your 2012 IT budget.

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