The Covid-19 pandemic has made businesses stop and look at how best they can operate remotely and how they can reduce cost. For both questions, the answer has been cloud computing. The ease of switching to a cloud setup and the potential of cost savings is making many business heads ask, “What are the financial advantages of the cloud?”

A win-win for businesses

Affordable cloud computing is helping small and mid-size reduce IT overheads enormously. Rackspace, a cloud company, estimates that 88% of its users have reported cost savings (and a further 56% say it has helped boost profits.

Instead of reducing cost by cutting capacity, switching to the cloud can help SMBs save while streamlining operations – now that’s a win-win.

During the Covid-19 lockdown, cloud computing reduces device sharing and aids social distancing efforts. Especially in an environment of telecommuting (‘work from home’), the cloud helps maintain full productivity and smarter collaboration.

What is cloud computing?

At its core, cloud computing means IT hardware being shared between multiple users. Servers, networks, storage space and tech support can all be shared between tens, hundreds or even thousands of users. This way, the operational and capital costs of the IT setup can be spread across the users too.

Why is this possible? Because most businesses don’t utilize the full capability or capacity of their computing hardware and software. Instead, shared resources can be used much more efficiently – and the costs are passed on to the client.

What capabilities it offers

Virtually every function that is performed on a personal computer or in-house server can be performed in the cloud. So much so, many businesses are simply migrating entire terminals to the cloud, merely using personal computers to access cloud resources.

Businesses can opt for public, private and hybrid models of cloud computing.

Some cloud services include:

  • Applications
  • Computing
  • CRM
  • Sales
  • Developer tools
  • Data backup
  • Content delivery
  • Security
  • Storage

Examples of businesses saving thousands/millions of dollars by shifting to the cloud


Read more

Is the cloud right for you?Small business tech trends 2020 | Applications in the cloud


How does cloud computing help a business save money?


This is one of the most significant savings. Organizations no longer have to make capital investment in specialized hardware.

Hardware operating cost

There is a substantial saving in operating costs, including for electricity and cooling costs. Housing server racks also has an economic cost, which can be saved.


Per user licences and online delivery of the latest software reduces capital outlay.

Reserved instances

This is a relatively new way cloud providers are delivering services. Essentially, it means businesses can ‘pre-book’ capacity and receive discounts, rather than paying pro rata. Businesses that can transfer work to off-peak times can save enormously.

Pay for what you use

This has become a mantra for cloud service providers. It means there is a close correlation between the capacity, bandwidth and storage that is used, rather than a business being tied into specific capacity arrangements which they will not use.

IT staffing

In-house IT departments add substantially to a company’s payroll. Migrating to the cloud means the human resources costs can be scaled back.

Reduced downtime

How rapidly tools can be rolled out across the company affects its productivity. With cloud deployment, services can be deployed to every terminal and employee virtually instantaneously.

Reduced security costs

With information stored behind industry-leading firewalls and intrusion prevention technologies, businesses can reduce security costs.

What are the benefits of cloud computing?

The biggest benefit of cloud computing is “on-demand” computing. Major cloud computing providers market this as ‘elastic’ service or “rapid elasticity”. It has helped businesses become a lot more agile and responsive in their service delivery.

Make sure your service-level agreement (SLA) enables the complete benefits of affordable cloud computing. At Technical Action Group, we work with businesses to realize the savings that cloud computing promises.