Kunnect Nation,

For almost two years now, we have been tooting the “Cloud Computing” horn and with reason. Everyday you hear about another story relating to how much someone is saving from having migrated to the cloud. Case in point, this article about the Federal Government yesterday on Wired… http://www.wired.com/cloudline/2012/05/cloud-fed-savings/

Is is true that the savings are real, or are they just short term savings? Initially, I used to believe that the savings might only be short-term, because I don’t need to buy any equipment (depreciable assets). That is true, but here are four more factors to consider:

1. Using a cloud based provider saves you money on a monthly basis when you compare it to amortizing equivalent hardware purchases.
2. Using a cloud-based provider has the added benefit of giving you “ongoing support” in your monthly cost. That also needs to be figured into the calculations.
3. Using a cloud-based provider gives you constant software upgrades. Premised based solutions typically require you to purchase software upgrades, which in turn can lead to you having to buy newer hardware.
4. Right around the time you think you are about to “get into your money” with your premise based asset purchase is usually when it is obsolete and you need to replace it. Keep on spending!

I could also go on about the taxation benefits of 100% write-off of cloud-based provider fees in the same year versus depreciating your assets over 5-10 years.

I say, “What are you waiting for?”, migrating to a cloud-based technology, irrespective of the industry, is having the best of three worlds; Savings, Support, and Non-obsolecense.

Fred Cote