IT capital expenditure: by eliminating server and storage costs and replacing these with “payǦ per-use” cloud
computing capabilities, customers can reduce their net IT capital spend,
x IT labor costs: by outsourcing IT services, customers can reduce their IT headcount and/or redeploy staff into
more productive areas of IT departments such as application development, and
x IT power and cooling costs: by eliminating the need to power and cool the
server and data centres, firms can save a substantial amount on energy bills.
Capital expenditure cost savings can be associated with the benefits accruing from hardware and software
consolidation, as well as a reduction in server and storage costs. For the private cloud computing model, the
following capital expenditure cost savings can be potentially available:
x an overall 20% reduction in the costs of external IT services through hardware consolidation and standardized
application frameworks,
x an overall 2% reduction in software maintenance costs achieved through software consolidation,
x an overall 18% reduction in server and storage costs through reduced hardware maintenance, and
x an overall 44% reduction in network hardware costs due to server consolidation, reduced facilities and fabric
maintenance.
Katarzyna Nowicka / Procedia - Social and Behavioral Sciences 151 ( 2014 ) 266 – 281 273
Additionally, the following cost reductions can be achieved by cloud computing model implementation (Centre
for Economics and Business Research, 2010):
x 20% reduction in application development costs due to productivity gains in IT services,
x 18% reduction in internal operations, maintenance and support costs.
x Power and cooling cost savings are the result of hardware consolidation, which eliminates the need to power and
cool large server and data centers. That can be reached on the following levels:
x 44% of total IT power and cooling costs in a private cloud computing environment,
x 61% of total IT power and cooling costs in a hybrid cloud environment, and
x 79% of total IT power and cooling costs in a public cloud environment.
IT capital expenditure: by eliminating server and storage costs and replacing these with “payǦ per-use” cloudcomputing capabilities, customers can reduce their net IT capital spend,x IT labor costs: by outsourcing IT services, customers can reduce their IT headcount and/or redeploy staff intomore productive areas of IT departments such as application development, andx IT power and cooling costs: by eliminating the need to power and cool theserver and data centres, firms can save a substantial amount on energy bills.Capital expenditure cost savings can be associated with the benefits accruing from hardware and softwareconsolidation, as well as a reduction in server and storage costs. For the private cloud computing model, thefollowing capital expenditure cost savings can be potentially available:x an overall 20% reduction in the costs of external IT services through hardware consolidation and standardizedapplication frameworks,x an overall 2% reduction in software maintenance costs achieved through software consolidation,x an overall 18% reduction in server and storage costs through reduced hardware maintenance, andx an overall 44% reduction in network hardware costs due to server consolidation, reduced facilities and fabricmaintenance. Katarzyna Nowicka / Procedia - Social and Behavioral Sciences 151 ( 2014 ) 266 – 281 273Additionally, the following cost reductions can be achieved by cloud computing model implementation (Centrefor Economics and Business Research, 2010):x 20% reduction in application development costs due to productivity gains in IT services,x 18% reduction in internal operations, maintenance and support costs.x Power and cooling cost savings are the result of hardware consolidation, which eliminates the need to power andcool large server and data centers. That can be reached on the following levels:x 44% of total IT power and cooling costs in a private cloud computing environment,x 61% of total IT power and cooling costs in a hybrid cloud environment, andx 79% of total IT power and cooling costs in a public cloud environment.
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