Comparing the costs of on-premise infrastructure to cloud infrastructure is not as simple as comparing apples to apples.
If you’re thinking about migrating your medical practice to the cloud, there are a number of variables to take into consideration. Evaluating your options for the better value means weighing the pros and cons of each, as well as extensively calculating your total cost of ownership (TCO).
How Does Cloud Hosting Save You Money?
All of the articles on cloud hosting services will talk about how switching to the cloud will save you and your business money. However, with technical considerations like third-party software for printing and scanning, enterprise storage and even an upgraded internet connection, it seems as if you’ll incur more costs than you initially thought.
So, where are the real cost savings in this new wave of cloud computing?
No Initial Investments or Extra Set Up Costs
Transitioning from an in-house network of computers to the cloud doesn’t require any upfront costs or investments. The cloud serviced provider takes care of the infrastructure and set up for a fixed cost.
When you have an in-house network, you have individual computers with individual hard drives. These need to be maintained separately because they are not all sharing a unified server. This means that you will be charged per computer set up and configuration.
You’ll find that your savings come from a one-stop-shop type of set up. Your service provider only has to set up one unified server for your entire business. That means one installation and configuration—one time. One cost.
Full Hardware Utilization
In the cloud, all of your employees will be working on a shared server infrastructure. This ensures that all your hardware resources are engaged to optimize your cloud computing efficiency.
This proves as economical, since you’re only using one shared server and not multiple servers that may store unnecessary information. You have the advantage of setting preferences for your storage needs so that your cloud server utilizes its capacity properly.
In other words, you won’t have to waste money continuously scaling your storage. Cloud storage only automatically saves what you set it up to save.
Less Power Consumption
Since cloud storage fully utilizes its hardware resources, it consumes less power. “Full utilization” may sound as if it means more consumption, however, it means that the infrastructure’s power is used more efficiently.
Computing tasks can consume a lot of power, making individual servers run slower depending on the workload. This increases your bottom line when you have to pay more for less in terms of performance.
A Reduced Work Force Expense
With cloud hosting and computing, you won’t have to rely on an internal or external IT company for maintenance. Your third-party service provider will take care of any infrastructure issues that may arise as part of your contract.
This means you’ll save on employee or contractor salaries as well as benefits. Not to mention the cost of external IT fees per computer or device.
In the event of a power outage or emergency, your system may crash. To prevent this, you’ll have to purchase extra hardware to ensure that your individual servers will still run. This ends up costing more in maintenance over time.
With cloud hosting, you won’t have to worry about needing extra hardware for redundancy. Cloud servers may spread out through multiple data centres to replicate your data. This creates resiliency, so in the event of a disaster, your systems will be up and running.
The Costs of Managing On-Premise Servers
When we talk about on-premise infrastructure (or, on-prem for short), we’re talking about the physical server at your location. This server is also managed and maintained individually by you.
The costs of managing on-prem servers requires a considerably large upfront capital investment. The initial investment covers the hardware and installation, but there are also continuous support and maintenance expenses to consider.
In terms of your Total Cost of Ownership (TCO), you have to take into consideration both Capital Expenditure (CapEx) and Operating Expenses (OpEx), as well as your security.
Your Capital Expenditures
As mentioned above, managing on-premise servers means having the infrastructure at your location. This factors into being a fixed asset, like your office building, work vehicles, equipment, and the maintenance required overall.
With an on-prem infrastructure, you also have to take into consideration the cost for your servers, power systems, storage, hardware, software, and licensing—as well as the installations, upgrades and maintenance.
A large capital expenditure can place a strain on your organization’s finances, which could end up taking away from more critical initiatives.
You also have to replace this hardware every 3 to 5 years.
Your Operating Expenses:
Many people will put their OpEx in the cloud category, however any ongoing costs to running a business or organization falls under this category..
Any items that are accounted and paid for monthly are your operating expenses, which is why most people find migrating to the cloud a much more cost-effective option since there is a small overhead.
While the cloud won’t eliminate certain costs like hardware, software, support staff, etc., it will still reduce them substantially.
The pros and cons of on-prem vs cloud security tend to weight the same.
Your on-prem security will be limited to your enterprise licensing and any other security measures you decide to take at cost. Your security isn’t automated, and so your organization is solely responsible.
Cloud security continues to evolve with dynamic resources, but can still be risky due to ephemeral security boundaries. However, cloud security is shared security. That means that the security responsibility is shared among your organization and your cloud service provider.
Security is something that is often overlooked, but can be costly when left vulnerable in either case.
Migration has its Advantages
Migrating to the cloud isn’t just about saving money. It’s also about the efficiency and all of the benefits from a remote infrastructure.
If you’re thinking about migrating your medical practice to the cloud, the IT experts at Greenlight ITC can answer all of your questions.