This blog is part of our Tribridge Cloud Playbook series, which is designed to help IT professionals proactively address common business disruptors. Click here to see the rest of the blogs in the series or here to download the entire Cloud Playbook.
Business can change rather quickly, so too must the IT resources that support growth and, ideally profitability. Perhaps the business is doing a build-out and taking over the space next door. It could be a new location across town. As the business assesses its needs and weighs the relative IT investment required, several things come to mind: is this long term or short term, is what we're considering IT-wise too much for the existing need, will we eventually use all the capacity, and when?
All good questions, and there are certainly many more. At a high level, however, the most important question is whether you really want to pay for excess capacity at all. Each time you confront a need to scale IT to accommodate a new location, new staff or a new capability, you must square this with existing IT infrastructure - how much excess capacity do I already have - and planned investment - how much idle capacity am I about the buy? There are, after all, fixed costs every time you scale, and those costs are purposely inflated because you must provision for peak loads, not average loads.
When you reach this point in your decision-making - should I buy or look to the cloud - it's likely that you've already considered compelling stats such as this from PWC's Strategy: Overall, the total cost of ownership for a cloud-based solution can be 50 to 60 percent less than for traditional solutions over a 10-year period. That's pretty compelling.
But the decision to invest in a more cost-effective approach to IT isn't just about ten-year time horizons. This is because scalability doesn't always mean up. Sometimes there are reasons - and not all bad - that you require less capacity. Perhaps the spin-off was successful, was sold, and now you no longer need to service the location. Maybe growth is happening so fast that you've already outgrown the built-out space. In both cases, if you're locked into an on-premise model you probably have some stranded investment on your hands.
Businesses that rely on the cloud for IT infrastructure don't fear change or the costs of scaling up or down. They can predict with certainty the costs of incremental scaling (there may not even be additional maintenance costs) and they rarely, if ever, pay for capacity they're not using. If they need it - even for single month or year, it's there.
You may not be ready to move away from what you've built on premise. But it's worth considering now how you'll play it when you're asked to spec out IT resources for a new location, office build-out or other inflection point in your business. Now is the time. Do the calculations - what resources do you have, how old is it, what can it support, how much excess capacity do you have, etc. When this decision becomes yours to make, you may decide it's time to consider a move to the cloud, a place where you can finally experience the benefits of living on a two-way street.
For more on common problems that lead many businesses to consider a move to the cloud, check out the Tribridge Cloud Playbook.