Are The Costs For Energy And Hardware Rising? The Cloud Services Is The Solution

Cloud services, The chip crisis and the increase in energy costs risk increasing the costs for the IT infrastructure of companies.

A situation that makes it more and more convenient to use Cloud services that allow you to reduce energy consumption and hardware purchase or maintenance costs.

A new boom for Cloud services

Many economic analysts have already highlighted the growth of cloud services in the post-Covid era.

According to the Cloud Observatory, spending on Cloud services in 2021 grew by over 20%, driven by Platform as a Service (PaaS) and Infrastructure-as-a-Service (IaaS) solutions. 

As the experts explain, 2020 was the year of the emergency with the implementation of Cloud services that allowed the operational continuity of the Companies, while 2021 was the year of investments to modernize the application park of the Companies. And information systems.

Today, companies rely on the Cloud to deliver their ERP or CRM business applications and provide collaborators, even in smart working, with platforms to support all digital communications from video calls to phone calls or chats.

Two critical economic factors could persuade companies to accelerate the move to the Cloud further.

More expensive hardware with the chip crisis

The chip market is facing severe global uncertainty.

Due to excessive demand ( + 35% in 2021) and difficulties in finding raw materials, the production crisis has led to delays in deliveries and a general increase in the prices of server, PC, and smartphone components.

To confirm this trend, which could last until 2023, is also Jean-Marc Chery, number one of the Italian-French giant STMicroelectronics (2020 turnover of 10.22 billion euros). “The entire supply chain – said Chery in an interview with La Stampa – is challenged by problems of logistics, access to basic materials, and energy supplies. It is difficult to make precise forecasts, but even in 2022, the production capacity will not be up to the demand “.

This means that the availability of hardware worldwide may be reduced. And when demand grows, and supply falls, rising prices are practically inevitable.

Activating services in the Cloud could allow avoiding this problem, reducing the need for servers on-premise.

Is your server on-site? With expensive energy, it costs more.

The other important factor that could convince many companies to move to the Cloud to reduce costs is the expensive energy.

Istat data speak clearly on this point. In October 2021, the production costs of the Italian industry grew by 7.1% every month and by  20.4% on an annual basis. Istat’s substantial rise in prices is driven by energy products, primarily electricity and gas.

The consumption of electronic devices could cause companies’ electricity bills to rise.

Let’s think of a server running 24 hours a day; assume an average cost of electricity of 0.22 euros per kWh, and the server could cost the company around 800 euros per year.

The increases in progress and those planned for 2022 (a new alarm to this effect was launched in recent days by Area, the Regulatory Authority for Energy, Networks and the Environment), could lead to an increase of up to 50% in energy costs, despite the measures already put in place by the Government for their containment.

An announced increase will affect the accounts of the companies that maintain internal data centers.

The benefits of the Cloud grow.

The use of the Cloud could considerably reduce the costs for managing corporate ICT infrastructures and not only from an economic point of view.

A Cloud IaaS service, for example, allows companies to take advantage of a server infrastructure stored in the provider’s Data Center. In practice, the company can create a virtual Data Center, which can be sized according to its current needs.

This allows you to quickly eliminate the costs of purchasing and maintaining servers and other equipment. To these are therefore added the energy savings.

The scalability of cloud services also makes it possible to accompany the company’s growth with a “flexible” infrastructure with adequate costs (until recently, IT managers were forced to purchase oversized hardware to protect themselves in the event of growth).

A Cloud solution, therefore, offers several advantages :

• guarantees flexibility and high performance for data access
• allows you to  size your infrastructure according to the needs of the moment, eliminating waste
• facilitates access to data from  anywhere and at any time
• allows you to  free up space on local PCs and servers
• lightens the work of IT departments
• supports business continuity.

How to choose a reliable cloud provider

All these advantages are achievable if you choose a reliable Cloud provider with adequate network infrastructures and security systems.

In the choice, it is also important to evaluate whether the supplier provides connectivity services because the real performance that the company obtains from the Cloud does not depend only on the quality of the server infrastructure and storage systems.

The efficiency of the data connection has the same level of importance because it allows you to reach the Cloud with concise latency times, a factor that significantly improves performance.

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