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The economics of cloud computing

June 27th, 2009 · 4 Comments

 

NetSuite Pricing

All of the technology and business contacts I regularly talk to keep telling me cloud computing. But what is it, what does it really mean for business and what are the financial and physical upsides?

Cloud means Internet. The computing takes place on the Internet – in place of the software you use executing on your desktop pc, it’s hosted on the Internet on a server installed in a data centre usually staffed by people who are experts in managing technology. This type of “cloud” software is sometimes called “on demand” or Software as a Service (SaaS).

Some good examples of well established Software as a Service are:

Web based CRM Software (Customer Relationship Management) – Salesforce.com pricing approximately $9 per user/month.
Small business management and accounting software (small business ERP) – Salesorder.com pricing $45 per user/month.
Medium sized business ERP software – NetSuite pricing approximately $99 per user/month.

There are 3 substantial benefits for every business here:

Time, cost savings and reliability

Businesses no longer need a dedicated IT professional to help them procure, bed in and monitor the systems platform thus decreasing operating costs and time to implement. The effort of vigilantly backing up information is eradicated as this is usually an inherent feature of the “cloud” software. Cloud software “operators” almost always have fail over systems that can be brought to bear in a very short amount of time should a serious problem occur.

Easier selection and more choice

Through the ubiquitous web browser, businesses now have instant access to a huge range of software packages they can in the majority of cases immediately try and effectively determine if the software fulfils their needs at no expense. This makes it straightforward for employees in large enterprises to circumvent the standard information technology procurement processes and easily assess and prove their business proposal.

Superior user experience

The net provides rapid feedback to software makers and has led to substantial progress in user interface design resulting in more intuitive systems in turn lowering learning times and improving user satisfaction. This of course means quicker adoption and better productivity.

Tags: Project Management Process

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