What is IaaS (Infrastructure-as-a-Service)
IaaS in simple words is Infrastructure as a service, where you are outsourcing your compute, server, database, and storage from a provider as opposed to powering it in-house. It is a product of advanced business technology and is a luxury of the 21st century. One of the major benefits of cloud IaaS is that it can optimize the cloud environment for maximum efficiency with little risk, which most other pillars cannot do. It also offers flexible and scalable resource usage that helps in managing data-intensive workloads and high traffic volume across every level of the enterprise in a more optimal fashion than on-premises environments.
Businesses recognize that in order to remain competitive in the current marketplace, they’ll need to construct a cloud strategy for their enterprise. Strategy development involves key stakeholders and executive board to decide on their response to the changing effects of the cloud service competition. But the IT department will have to play a bigger role due to emerging services such as Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS).
It is the CEO’s goal to find new ways to produce value for stakeholders, optimize costs for the business, and remediate risk wherever possible. As will be explained, Cloud IaaS offers a streamlined path to meeting these objectives without significant business disruption. This is an added reason why Cloud IaaS is a popular solution among other pillars of the cloud. As more companies migrate to the cloud, taking advantage of opportunities to streamline internal processes at a reduced cost becomes imperative. Agility will lead you into the future.
7 Business Benefits of IaaS Cloud Computing
1. Cost Savings
Whether to improve the operational performance or foster capabilities for future growth, the investment in cloud IaaS must be financially viable. The strong financial incentive advantage that cloud IaaS offers makes it financially viable and also saves lot of costs.
IaaS replaces your on-premise data centers with a service that lets you provision infrastructure resources based on monthly needs. Since these investments can have a lifespan of 3-5 years, you’re forced to use these high-maintenance resources till their end of life. Unless, you want to forfeit the investment to pursue alternative measures, which would amount to thousands of dollars wasted.
For these reasons, the strict obligations you have with on-premise resources is not good for business longevity. The millions invested in the on-premise infrastructure forces companies reschedule spending on other value adding departments. This inability to invest in other areas might effect the overall operational efficiency and customer experience.
Therefore, one of the compelling IaaS benefits is that you immediately loosen the high-priced dependability on the on-premise datacenter. You make the transition into the outsourcing paradigm where you are provisioning infrastructure based on business needs. This not only alleviates your business from financial risk, but also saves a lot of money.
2. Maintenance and Scalability
Among the long term benefits of IaaS cloud computing, maintenance and scalability also holds high. By deploying Cloud Infrastructure, you’re replacing the on-premise environment with a service that offers monthly pricing, faster responsive, scalability and low maintenance.
Beyond the initial investment, your on-premise environment requires investment in human resources for data center management. You must hire a full team with high technical expertise to oversee operations in multiple locations. It can amount to millions of dollars in just a few years for a relatively small staff size. Adding rent to this cost makes keeping the real estate in your possession and running it expensive. Also, Scaling your on-premise environment requires both financial and operational excellence to ensure no disruptions.
3. Business Continuity
On-premise data centers require yearly-recurring system implementations and upgrades. The reason these are challenging is not just the frequency, but also the impact they have on business continuity. These updates are highly disruptive to the business, taking weeks, even months, to complete. Productivity across the company might suffer as it has to operate at less than maximum capacity until the implementation/upgrade finalizes. Especially, if your business model is data-intensive and relies on smooth technological flow.
Also, your in-house team must independently negotiate the cost-benefit analysis of new upgrades when they become available. This is no easy task. Not only is it work-intensive but it can be difficult to manage across the business if you decide to upgrade. Therefore, one of the additional benefits of cloud IaaS is that your provider will keep your infrastructure running on the latest installations. They also expedite the upgrade process to keep you up to date and running quicker, saving you additional time as well.
4. Disaster Recovery
Another drawback of on-premise is disaster recovery i.e. the cost of putting out fires. Disaster recovery is stressful in terms of efforts and the cost of remediating damages can dive deep into the budget. For this reason, many companies conduct pre-emptive maintenance i.e. procedural behaviors that check system health on an ongoing basis. Yet, even with these in place, disaster still strikes, and the business still suffers not just financially, but also operationally. Also, the amount of time invested in regulatory maintenance can be utilized in other important tasks.
The maintenance and cost of on-premise are extraordinarily high. Through cloud IaaS, these responsibilities and their associated costs are shifted to a provider who is much more qualified to manage these in a holistic, seamless fashion. IaaS providers such as Oracle Cloud and Microsoft Azure have excelled in disaster recovery process. Streamlining the process is allowing them to offer cost-effective, flexible and low maintenance infrastructure as a service. As a result, some businesses reduced their infrastructure spending drastically within 2 years.
5. Switching Capital Expenditures to Operational Expenditures
Previously, CFOs favored CapEx for IT investments because companies that capitalize costs could record higher profitability in the early years. This process incentivizes the investors to invest because it demonstrated strong company ambition towards the future. However, this would ensue in low profitability later because higher net profits would in turn lead to higher taxes. Therefore, recording infrastructure as CapEx increased the your company’s book value, it led to higher costs down the road.
Through an operationalized approach, infrastructure is recorded as an operational expense and written off once the resource is consumed. This way, infrastructure doesn’t lead to inflated profitability and companies can avoid additional income tax. In addition, since companies do not require these high capital expenditures, they do not require additional funding to finance IT. For SMBs, this creates financial flexibility since small scale projects can be undertaken, unconstrained by capital considerations and loans.
Beyond just the immediate cash flow, benefits of IaaS include huge ramifications on the overall financial elements of your business. If done correctly, Cloud IaaS can lead to a high monetary gain in the future and renewed financial freedom. All these coming without the significant business disruption that comes with other pillars of the cloud.
This also shows the increased importance of collaboration between IT and Finance. Before, on-premise gave IT the freedom to remain siloed and not interact with other areas of the business. With the transforming effects of Cloud, achieving and sustaining business-IT alignment becomes important to produce better results..
6. Improved Customer Experience
Not just the huge cost reductions and more financial freedom, IaaS also increases the productivity of key enterprise business drivers. How?
Streamlined automation and advanced computing enables end-users complete their workloads with greater efficiency. This in turn leads to greater value for the customer when they interact with your company.
What is a key business driver? A key business driver is something that drives the financial and operational results of a company. These depends on the nature of your business.
Examples on How IaaS Enhances Key Business Drivers
Service Delivery: Service delivery demands unlimited network availability and excellent service. Keeping the system up and running required top class network that is durable and consistent. Also, to empower your employees to make the right decisions, they must have tools to tap into your wide customer database. Otherwise, any delay is evidence against your ability to deliver on your promise. In an on-premise environment, this threat lingers at all times and depends on your in house team’s ability to manage the environment.
Website: It could be that your website has very high traffic. This requires your infrastructure to support many visitors accessing the page using variety of devices from different locations. Failing to handle such loads can result in high bounce rate and low conversion rate. These in turn will dent the brand image and revenues. In an on-premise world, the task of enabling this growth becomes more and more difficult and with less guarantee.
IaaS helps you in reducing the threats to your key drivers. The enhanced IaaS computing technology enables businesses to operate at maximum efficiency i.e. with less delay, and greater precision, for the customer. Cloud Infrastructure integrates the servers and automates data exchange processes needed for the technology to run, creating streamlined processing and higher performance speed.
7. Scalability and Flexibility
Scalability of cloud IaaS service model helps you provision additional infrastructure resources to power and sustain growth as it is happening, not after. This flexibility and scalability offered by IaaS enables full adaptability to capitalize off opportunities and mitigate threats in the market.
Increasing the computational performance of the on-premise environment is expensive and also requires high technical expertise. Unless IT conducts an ongoing SWOT analysis to know what the needs will be, they will constantly be in a reactive state. A proactive approach to this can only be achieved through Cloud Infrastructure. This added agility is one of the more subtle, but impactful, business benefits of IaaS that many companies hope to achieve and you can too.
Aside from the cost, the performance of on-premise simply does not fare against Cloud IaaS. Cloud IaaS is designed and built for faster processes with less manual support needed. Through advanced technologies such as serverless architecture, VMs, and containers, the commercial viability and strategic benefit of on-premise will continue to go down as the computing speed, flexibility and benefits of IaaS continue to go up. Therefore, it is best to make the transition sooner rather than later.
Transitioning to Cloud IaaS adds real value to the business and gives IT the capabilities it needs to keep the business running at a much more efficient rate than on-premise.
Moving to Cloud IaaS
To improve market positioning in today’s highly competitive environment, you must streamline operations as much as possible at the lowest cost. Any chance to improve performance in a way that enhances the customer experience is worthwhile. For this reason, you should consider abandoning your on-premise, at least partially, so that you can take advantage IaaS, especially if you find your business devoting high costs to IT maintenance and on-premise resources, and you are approaching the end of life for data centers. That way, you can give IT the means to power the business and lead it into the future without losing an arm and a leg.
Once individuals begin to strongly consider migrating away from on-premise infrastructure to receive the benefits of IaaS, the next question becomes which provider to go with. This decision can be made by reading the AWS and Oracle Cloud comparison to know how these two market leaders go head-to-head in areas where it matters most – Cost, Performance, and Security.