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It’s official. Cloud Computing is not just an expense but a contributor to cost-reduction and innovation.

By Paul Caffrey, Office 365 Specialist for O2 Telefonica, MJ Flood Technology

Follow me on Twitter: @PaulMMCaffrey

Cloud Computing is in its infancy but as broadband speeds and quality of service increase, organisations large and small are considering the option of moving IT services to the cloud.

In a recent survey conducted by MJ Flood Technology, we asked organisations if they would move all of their production data to the cloud. A little over one third or 36 per cent responded in the negative. Is this because they view cloud as an expense rather than a contributor to cost reduction and innovation?

Lero, Ireland’s National Software Engineering Research Centre has for the first time presented empirical evidence of the benefits of cloud computing.

Their findings outline that cloud computing changes how Irish businesses communicate with customers and how employees interact. This improves the innovation and collaboration for companies. The research also found that businesses can save up to 65 per cent on administration costs when compared to running technology onsite.

Dr Lorraine Morgan of NUI Galway stated; “The move away from perpetual capital expenditure to operational expenditure was also seen as a significant cost benefit of adopting cloud computing especially in the current economic environment where the Central Bank has highlighted the shortage of traditional loan finance for Irish business.”

And they’re not the only commentators lauding the benefits of cloud.

The European Commission recently published a new “Digital Strategy”, describing how faster adoption of cloud computing will increase the European GDP by a staggering €160 billion by 2020, that’s a whopping 1%!

So with this in mind and in the words of Taoiseach Enda Kenny who recently advocated Ireland’s potential to “become the cloud computing capital of the world”, another question comes to mind: is cloud computing just another expense that Irish businesses don’t need?

The phrase “cloud computing” describes how businesses can access applications over the internet, negating the need to run hardware and/or software locally such as email servers, data storage servers or business applications.

If we take the most fundamental IT service that most businesses provide – email – we see that the majority of organisations run on-premise solutions such as Microsoft Small Business Server or Microsoft Exchange. However, these on-premise solutions have limited onsite storage and many organisations are struggling with demands from users for bigger inboxes and greater storage capacity. In addition, we see the evolution of communications as businesses adopt tools such as instant messaging and online meetings.

Companies such as Microsoft have taken on-board these challenges and continue to work hard on solving email infrastructure problems like such as storage, security and remote access to data. They have also developed cloud services such as Office 365 to fulfil demands for multimedia, multi-channel communications and information exchange, which is slowly becoming a fundamental tenet of corporate life.

It is important to state that migrating to the cloud will improve business operations no matter what your business but the move to the cloud is a financial decision for businesses to make.

For most organisations, the days of investing large sums of money into onsite IT systems can be avoided as a move to the cloud significantly reduces capital costs. We are seeing cost savings of between 30 and 50 per cent in moving to cloud compared to on-premise solutions. It’s a massive saving and one which should provide some food for thought for businesses looking to leverage technology to improve business performance and improve customer service.