How does Cloud change IT budget planning?

Stephen J Bigelow of TechTarget writes this week about the impact of cloud on IT budgets.  Traditionally computing was capital-intensive and depended on on-site technology and staff.  When a business needed a service, such as Microsoft Exchange, it would budget for servers, software licenses, and often infrastructure.  The business would then wait for weeks (or months) for the servers delivery and installation which would then require deployment and testing.  IT staff would assign user rights and if issues arose, IT would deal with them.

Cloud services such as software as a service (SaaS) has revolutionised this traditional computing model.  Third-party cloud service providers can now render many of the important services that businesses require; the provider sets up its own infrastructure, manages its own equipment and licences and delivers its services over the Internet.  Businesses can purchase these services on a per-user or per-month basis.  Instead of incurring a capital expense, businesses budget for cloud as a recurring operational expense.  The cloud frees businesses from performing their own maintenance and support and allows them focus on services rather than just technology.

Justifying capital is no longer necessary; each business unit or department can budget for monthly cloud service expenses.

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