How Cloud Technology Reduces Costs

UPDATED June 21, 2023

Keeping costs down is essential to any business. You want to remain operationally functional but ultimately, you must stay in budget in order to function at all. We've been carefully selecting content lately that helps you do just that: improve operational efficiency and function while staying in your budget. Today, we focus on how your total spend on technology can be lessened by migrating to a cloud solution. 

As it pertains to technology Total Cost of Ownership (TCO) is a calculation that helps businesses determine the cost to assess, purchase, own, and maintain technology in their business. You may have heard, in passing, that a Cloud Hosted Services solution can help your business reduce TCO with:

  • Elimination of capital costs
  • Faster deployment and increase employee productivity
  • Flexibility for a mobile workforce
  • Reduced risk with backup services
  • Decrease overall downtime and improve productivity

How does TCO relate to the Cloud? 

Every business wants to grow, innovate, and serve their customers more efficiently, and even if they have only the barest understanding of cloud, they’ve heard that a cloud solution can give them the power to achieve these goals and today, business owners have more options than ever. In the end, many make their decision based on which option will result in the lowest TCO for the highest return on investment (ROI). Basically, they want the most bang for their buck. 

Let’s look at the following components of total cost of ownership.

  • Assessment
    One of the first expenses related to total cost of ownership is the direct and indirect cost of assessing which cloud service will be right for the business. In between free program trials, interviewing cloud providers, and other measures, making this decision can be a little complicated, sometimes expensive. We recommend cloud services because the right hosted service provider will provide cloud capabilities with a Service Level Agreement (SLA) of 95% or higher.
  • Security
    Cloud breaches and leaks of private data are always a part of the news. Unfortunately, strong evidence suggests that this trend will inevitably continue. This makes sense because while the cloud may be your best option, all things come with their downsides. Perhaps people are not deploying their environments correctly or securing them in the right way is paramount. Having your cloud data hacked is costly, financially and socially. We recommend a  Cloud Hosted Services provider which uses several layers of enterprise-class security measures to keep their client’s data safe.
  • Data backup
    If the server for a cloud environment crashes, will your data be safe? Will your business still be able to function and serve your customers? Or will your business have to just take the loss? Your total cost of ownership calculation should include the long-term risks and benefits of cloud data backup. This includes things like a backup and disaster recovery plan. You can also rely on a cloud provider for this since data created on a hosted server is automatically backed-up, and the customer is guaranteed access to their data whenever they need it.  
  • Pricing
    Pricing, understandably, is one of the highest concerns in the total cost of ownership calculation. Pricing for any cloud service varies. Some providers charge monthly or yearly, with additional costs for add-ons and usage. Similarly, some cloud providers charge based on usage and bandwidth, leading to inconsistent monthly statements. In the end, the smartest way to reduce TCO is to find a provider that offers the highest value at a consistent price. However, the right Hosted Services plan won’t be the cheapest on the market. Instead, it will offer the highest value for the highest quality product at a consistent monthly rate.
  • Maintenance
    One of the most significant benefits to cloud technology is offloading the cost of maintaining onsite servers. When businesses leverage the cloud, they can reduce TCO by cutting the costs of hiring on-site technical professionals, as well as the general cost to upkeep the servers and the space that houses them. For cloud environments, the provider is responsible for all maintenance on the hosted server, completely offloading the burden of maintenance from the clients.
  • Customization
    If a business doesn’t have the resources to customize business applications in-house, they can leverage the cloud to help them. However, the level of customization depends on the type of cloud technology they choose. The best part is with the cloud, you can sign up for as little or much hosted capacity and capabilities as you need. The right cloud provider will work with you to develop a hosted package that suits the needs of your business.

I feel the need to say here "BUT WAIT, there's more!" This discussion of Hosted Services doesn't even discuss a cloud environment's other benefits, such as the high reliability of virtualization and converged infrastructure. There are so many opportunities in front of you when choosing the cloud for your data. However, if you're still concerned, let us know and we can get your questions answered efficiently so you can stay on track to succeed at your goals. 



Cloud services can reduce costs across the board for businesses of all sizes. The cost of servers, maintenance, innovations, and upgrades are spread through a multitenant hosted infrastructure, allowing the cloud provider to offer enterprise class services to every client. Find out today how Cloud Solutions from Centre Technologies can help your business reduce TCO. Contact us directly today.

Originally published on January 5, 2015

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About the Author

Emily Kirk Emily Kirk

Creative content writer and producer for Centre Technologies. I joined Centre after 5 years in Education where I fostered my great love for making learning easier for everyone. While my background may not be in IT, I am driven to engage with others and build lasting relationships on multiple fronts. My greatest passions are helping and showing others that with commitment and a little spark, you can understand foundational concepts and grasp complex ideas no matter their application (because I get to do it every day!). I am a lifelong learner with a genuine zeal to educate, inspire, and motivate all I engage with. I value transparency and community so lean in with me—it’s a good day to start learning something new! Learn more about Emily Kirk »

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