How Cloud Computing Helps Slash Costs in Business and Government

Huge IT expenses, begone!

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Once only a pipe dream of forward-thinking techies, cloud computing is advancing by leaps into Americans' daily computing experience. The idea is that users, rather than keeping their files and programs on a single personal computer, store them in a "cloud" of server banks, allowing them to access the files from anywhere. Now some experts are wondering if cloud computing could help save small businesses by allowing them to drastically cut costs. Here's their case. (Hat tip: Like so many great things, we first heard about this from Matthew Yglesias.)

  • How Clouds Save Money  The Brookings Institution's Darrell West discovers cloud computing's cost-saving potential. He recommends the federal government use cloud computing, which he says could save billions.
To evaluate the possible cost savings a federal agency might expect from migrating to the cloud, in this study I review past studies, undertake case studies of government agencies that have made the move, and discuss the future of cloud computing. I found that the agencies generally saw between 25 and 50 percent savings in moving to the cloud. For the federal government as a whole, this translates into billions in cost savings, depending on the scope of the transition.
  • Why It's Perfect for Government Spending  Tech Daily Dose's Juliana Gruenweld recounts a speech by Federal Chief Information Officer Vivek Kundra. "In the government, it can take years to procure, configure and deploy technology solutions," Kundra said. "By using cloud services, the federal government will gain access to powerful technology resources faster and at lower costs. This frees us to focus on mission-critical tasks instead of purchasing, configuring and maintaining redundant infrastructure."
  • Helps Small Businesses Compete Big  ReadWriteWeb's Alex Williams concedes that switching to the cloud isn't easy and could be costly at first. But "cloud computing is one of those classic disruptions to a business that over time becomes part of the fabric for a how a company operates." But, as businesses grow, being on the cloud eliminates the need for costly infrastructure purchases, like buying servers or upgrading physical hardware. "Companies that can take advantage of it may be best positioned to compete against their larger counterparts."
  • City Governments Already Saving  Google's Harry Wingo beams, "Conrad Cross from the City of Orlando was on the panel this morning as well, talking about how his city reduced IT costs by 60% by using Google Apps. And the City of Los Angeles -- which adopted Google Apps a few months ago and expects to save millions of dollars a year -- makes a cameo in Brookings’ report." He concludes, "Brookings made several recommendations in their new paper on how policymakers can do that, and we hope Congress will take up their challenge."
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