Can companies really save money by turning to the cloud? This is the current topic for debate doing the rounds among some companies. Logicalis (News - Alert) feels that the amount of money which a company can save by using cloud services is a moving target. Four ways in which companies can save money by using the cloud are provided by Logicalis.

In a release, Mike Alley, director of managed services solutions at Logicalis, said, “Everyone’s pointing out that using the cloud means you’ve turned a capital expense into a more manageable operational expense. That is true, and it has significant merit. But it doesn’t paint the whole picture”

Alley added that there is a direct relation between the amount of money a company saves or spends in the cloud and the level of services they employ. Companies therefore enjoy increased operational efficiencies and risk reductions. With the more effective IT delivery model, companies are also able to meet greater demands from business units. The top four ways of using the cloud which can actually help a company save money therefore need to be considered while having any discussion about cost savings in the cloud.

According to Logicalis, the top four ways are: shared resources, efficiencies of scale, business agility and same equals more. Based on the sheer volume of purchases the cloud provider makes, some money can be saved by shifting the procurement of capital equipment to a third party. The tools to automate patch, performance and capacity management will be available with a serious cloud provider. While these tools are costly, it becomes cost effective when the cost is spread among multiple users in a cloud environment. Gaining access to additional computing resources with a cloud provider is as simple as issuing a change order. Demand for IT services may increase when things in IT go well. While overall reliability and business productivity increases, this may however diminish operational cost savings.