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Cloud Based Software: 10 Reasons It's The Best Approach



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Cost savings Even before the current recession, businesses were facing dual pressures to both reduce their operational budgets and more importantly reduce or remove expenditure on capital items. These dual factors have encouraged organizations to look to cloud computing, and in particular cloud based applications which meet both of those objectives. Cloud computing solutions tend to have a lower total cost of ownership (TCO) than traditional on premise applications in part due to the greater economies of scale that cloud computing vendors enjoy - these economies of scale are created by using shared infrastructure, distributed over all users. Cloud computing solutions also include the cost of any upgrades and maintenance in their subscription pricing, whereas with traditional on-premise software, maintenance is an extra cost borne by customers. The on-demand nature of cloud computing solutions also means that customers can increase or decrease their usage rapidly, thus enabling them to reduce their costs quickly in a downsizing situation. In the case of small and medium businesses (SMBs) or discrete business units of larger organizations, these entities tend not to have the complex, highly structured needs of large enterprises. Cloud computing solutions typically have a feature set that is scalable both up and down, giving these organizations the ability to grow into increased complexity as their needs change. Finally, cloud computing solutions tend to offer free trials and other options that give organizations an extremely low barrier-of-entry into the product. This is in direct contrast to traditional on-premise software, which is geared towards large, out of the box investment and lengthy implementation cycles.