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6 minutes read

AWS Cloud Economics: Is Cloud Computing Right for You?

By Robert Kazmi
By Robert Kazmi
App Development
6 minutes read

Understanding AWS cloud economics can help your business determine if cloud computing with AWS is the right fit for your needs. Many organizations discover that cloud computing makes the most financial sense and gives them opportunities to employ tactics like edge computing. Furthermore, organizations are finding that cloud apps better serve the needs of their users. 

The issue many businesses come across is that there are several cloud providers. Amazon Web Services (AWS) is the most popular cloud provider globally, but that doesn’t mean that AWS will be the best choice for your business. In this post, we will explain what the term cloud economics means and the business value of AWS cloud computing. 

What Is Cloud Economics? 

The term cloud economics refers to studying and analyzing the costs and benefits of cloud computing from a business perspective. For example, cloud economics explores the return on investment (ROI) of switching cloud providers or the total cost of ownership (TCO) of one cloud solution versus another. Cloud economics plays a crucial role in helping businesses understand the value of cloud computing. 

Many businesses are still using on-premises data centers. It is very easy to say that the cloud is a better solution than on-premises data centers, but smart organizations do not make important decisions based on words alone. Business leaders want to see clear cost-benefit analysis and real-world data before making big decisions like migrating to the cloud. Cloud economics helps demonstrate the business value associated with these HiTech solutions. 

When business leaders have a clear understanding of the economics of cloud computing, they can make better business decisions, optimize their investments, and find the solutions that bring the greatest value to their organizations. 

AWS Cloud Economics 

Now that you know what cloud economics is, let’s take a more detailed look at Amazon Web Services. AWS is the most popular cloud provider globally, but that doesn’t mean we shouldn’t fully investigate the business value associated with choosing this provider. The main benefits associated with the AWS cloud are:

  • Total cost of ownership (TCO) reduction 
  • Increased employee productivity 
  • Increased business agility 
  • Operational resiliency 

Total Cost of Ownership (TCO) Reduction 

Cost savings are often the first benefit of cloud computing that many business leaders want to discuss, and for a good reason. Purchasing computing resources is not cheap if you go it alone, but when you choose a cloud provider like AWS, your business significantly reduces its total costs. Organizations see significant cost savings when they choose AWS as their cloud provider. 

Cost savings go beyond the cost of computing resources. Organizations that choose AWS cloud solutions also see significant labor cost reductions. Deploying and maintaining on-premises hardware requires a large IT investment in time and money. Migrating to the AWS cloud reduces the number of labor hours needed from your IT team. 

Amazon Web Services gives organizations the ability to further reduce their costs by offering competitive pricing models and tools such as:

Pay-As-You-Go

One of the easiest ways to waste money is by paying for services you are not using. AWS allows businesses to pay for the resources they use without locking them into long-term contracts or requiring a minimum spend amount. With AWS, your organization can ditch up-front costs and only pay for the resources you use. 

Tiered Pricing 

AWS uses a tiered pricing structure for data transfer and storage. So when your organization uses more, you pay less. Furthermore, if you have a high-volume project with unique needs, you can get custom pricing and volume discounts from Amazon to help your business meet your needs at a fair price. 

Trusted Advisor

Trusted Advisor is an AWS tool that inspects your AWS environment to find additional ways your business can save money. Additionally, Trusted Advisor also looks for ways to improve your performance, security, and application reliability. 

Cost Explorer 

Cost Explorer is a free tool provided by Amazon to help organizations save money. Cost Explorer provides detailed reports for common spend questions using current and historical data. The tool also gives businesses the ability to forecast their costs, create custom spend reports, and extract billing information to use in external tools and applications. 

Increased Employee Productivity 

Cost savings are not the only benefit associated with AWS cloud solutions. Increased employee productivity or efficiency is another way organizations benefit from cloud computing with AWS. For example, IT teams no longer have to spend time deploying or maintaining on-premises data centers. As a result, these teams can spend more time innovating, focusing on development services, and improving operational efficiency across IT environments. 

AWS cloud solutions also help non-IT employees work more efficiently by simplifying the tasks associated with managing and sharing data. Data has permeated every facet of business operations, and today’s modern business world is driven by big data. As a result, most employees will have to interact with your data centers in some fashion. 

Increased Business Agility 

Cloud computing gives businesses the ability to scale and deploy new applications and features faster than ever before. AWS cloud solutions help increase business agility because it is scalable on-demand. Organizations can quickly scale the resources used by their web and mobile applications to match demand as it fluctuates. Not only does this help businesses optimize their spending, but it also gives them the ability to adjust to market demands in real-time. 

Operational agility can benefit businesses of all shapes and sizes. However, DevOps teams will find that AWS cloud solutions provide a level of flexibility and agility that other cloud providers can’t match. 

Operational Resiliency 

On-premises data centers are vulnerable to power outages, natural disasters, and more. AWS cloud solutions offer businesses a resilient option impervious to natural disasters and are always available to your teams. In addition, your organization will benefit from the improved availability and stronger security measures afforded by cloud computing. Plus, AWS ensures that your data meets all regulatory and compliance requirements so that your business can focus on the tasks at hand. 

Final Thoughts 

Making a strong business case for cloud computing is not difficult. AWS cloud solutions are industry leaders and provide several benefits beyond cost savings. If you’re ready to learn more about AWS cloud economics and review all of your available options, reach out to an experienced app development partner that is an AWS expert.

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