The Big Payback

By Ryan Bonner
Brightline Technologies

How The Unseen Effects of the Cloud Are Making Companies Money and Changing Corporate Strategy
By now, we’ve all heard the marketing lingo and buzzwords that seem to swirl around the current cloud computing trend: flexible infrastructure, scalability, real workforce mobility, and unparalleled collaboration. The promise of a lean, mean, omnipresent computing environment is enough to warrant consideration by business owners, executives and IT personnel alike. But as cloud technologies become more and more commonplace in the business world, companies both large and small are beginning to take notice of some of the unforeseen financial and operational effects of the cloud.  Michigan-based businesses are among those that have begun to seek out and demonstrate some of these effects.

The resulting effects certainly warrant discussion. Now that the general newness and excitement of the cloud have given way to measured observation, companies are looking more at how the adoption of these systems will affect their operational costs, along with their best practices. ROI and TCO used to be measured by hardware, software, and hosting costs alone. Now that the simple math has been done, industries are starting to look at the long-term effects that the cloud will have on risk management, tax exposure, and a host of other day-to-day costs that are affected by the trickle-down of these new ideologies. A few Michigan businesses are helping to pioneer this new understanding of the cloud.

Innovation That Benefits the Bottom Line
Energy Design Service Systems (EDSS), a Michigan-based certified energy consultant has begun to notice some of the financial benefits of moving to a cloud environment. EDSS is well established in the business of combining professional engineering, certified public accountant experience, and grant authoring; yielding over $300 million for their clients last year alone through tax deductions and credits, grants, rebates, and incentives. Along the way, they’ve found more than a few ways that adoption of a cloud computing solution can put money back in the corporate coffers.

Going beyond the more obvious savings that companies associate with virtualization, such as reduced hardware costs and improved server/admin ratios, EDSS has unearthed a number of federal and state grants, up to $275,000 in some cases, that incentivize technology investment. Additionally, there are rebates available, often reaching $15,000, based on the amount of energy consumption that is reduced by eliminating the power-hungry components of a traditional system. As a capstone to all of these benefits, EDSS can often demonstrate to insurance providers that moving computing off-site can significantly reduce risk to the business, resulting in an equally significant reduction of insurance premiums. While these benefits pale in comparison to the millions of dollars that businesses can acquire through EDSS’s other programs, such as those pertaining to LEED compliance and cost segregation, the one-two punch of upfront grant money, trailed by incentives and risk reduction can often give a business everything they need to evolve their technology base ahead of the competition.

It’s not always necessary to move an infrastructure off-site to realize some of the unforeseen benefits of cloud technologies. Some companies, whether burned by co-location in the past when it was in its infancy, or due to vendor restrictions, choose to employ a private cloud. Using the same practices of server and desktop virtualization, hardware consolidation, and centralized data, companies can shrink the footprint of their infrastructure while increasing flexibility. The inevitable question asks what can be done with the unused square footage in a traditionally built data center; the answer can include a windfall of increased revenue.

A New Use for Old Space
Steve Jacobs is the founder of Velocity Data Centers, a Michigan-based technology innovator, and he’s been helping companies across the country use the location-agnostic nature of the cloud to liberate the prime real estate that’s in their existing data center. Velocity’s approach is unique; the company engineers and manufactures modular, pre-engineered concrete data center structures that can be tucked into a discreet, unused corner of a client’s property. Once the servers, along with their thermal cooling needs, are removed from the main building, the old data center can be repurposed for any number of uses. In one example, a hospital in the southeast United States is planning to install new medical imaging equipment, where the old data center currently resides. This shift alone will result in an estimated $53 million in revenue over the next five years, and save the hospital a costly building expansion. The added revenue will pay for both the modular data center and the medical equipment within one year.

A multitude of stories just like these are cropping up across the Michigan technology landscape. In the same way that uses for electricity or the Internet weren’t fully realized until years after their invention, new aspects of cloud technologies are regularly being uncovered. The old way of understanding the cloud appealed to CIOs and IT professionals, because of its ability to improve infrastructure, even as IT budgets shrank. The new understanding of the cloud appeals to CFOs and COOs alike, because of its ability to shrink overhead, mitigate risk, incentivize innovation, and pave the way for more cost-effective corporate strategy.  As the implications of those new uses are understood, we’ll see new ways that businesses in Michigan can become more efficient, both operationally and economically.

Learn more by visiting:

www.brightlineit.com
www.edssenergy.com
www.velocitydatacenters.com

Ryan Bonner is the Business Development Manager at Brightline Technologies, a Michigan-based IT solutions provider. Contact him at  ryan@brightlineit.com