How SME's can save 40 percent on IT costs

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How SMEs can save 40 percent on IT costs

Medium-sized companies make a major contribution to the success of the German economy. Innovation is the driving force that makes it possible for a medium-sized company to survive and grow in the long term. The cloud has not only conquered large companies in recent years. It also offers some advantages for small and medium-sized enterprises (SMEs).

The challenge

One of the biggest challenges for small and medium-sized enterprises is currently the digitization of business processes. At first glance, the step to a cloud solution seems to be an ideal start. Using the wrong strategies can be expensive or slow down company processes in their execution. At the same time, there is a certain pressure to develop new digital concepts and put them into operation. This creates uncertainty. In order not to make mistakes, companies rely on tried and tested on-premise solutions and miss the opportunity and advantages of innovative cloud technologies.

On-premise is usually not worth it

Acquiring, managing and maintaining data centers does not necessarily have to exist as one of their tasks within the company. Providing an on-premise infrastructure is associated with meeting certain basic requirements. These include investments in expensive hardware, network connectivity, fail-safe power supply, physical security and cooling. As a company, this effort ties you to the provision of numerous resources that only indirectly contribute to making operations more efficient and also eat up vast amounts of money.

While running your own servers gives you a sense of control, on the other hand, it ties up your IT instead of giving it the freedom to focus on productive applications and IT strategy. Companies that set up their core applications in a managed cloud remain more flexible strategically and operationally. Those responsible can readjust capacity at any time, without having to worry about performance and availability in operation.

Advantages of the cloud

Cost reduction is one of the most common motivators for moving to the cloud, as replacing an aging on-premise infrastructure with a more efficient cloud solution is virtually guaranteed to reduce costs. Running your business applications in the cloud can save you over 40% compared to on-premise infrastructure.

Here are three benefits for businesses to run their applications in a managed cloud instead of becoming an infrastructure operator themselves:

1.The right strategy saves costs.

With the help of this sample calculation, we want to educate on how the right strategy can help you and your business save money. The calculation shows how a company can save more than 70,000 euros, or about 40 percent over a three-year period, by running an ERP application in the cloud instead of on-premise.

The biggest money-eating factors here are personnel costs and the network. Outsourcing services such as the security service, backup management and other measures offers the opportunity to save enormous costs.


2.Transparent billing and planning

Many midmarket companies find it much easier to approve flexible, ongoing costs instead of making large one-time investments. This is because required IT resources are rented, not purchased. This eliminates the need for large investments to purchase hardware. This is also a clear advantage for accounting, as business expenses are straightforward and deductible compared to depreciation on purchases.

3.more flexibility

With the cloud and its associated services, automating repetitive activities in your business is an important step towards the future and innovation. Automating activities that are performed multiple times brings the advantage that the activity can be repeated accurately and as often as required, there are no human errors due to incorrectly executed commands and most importantly there is a massive time saving. While the flexible cloud architecture improves your business agility, automation enables faster innovation and frees up employees to spend more time on important tasks. In this way, you can innovate faster and significantly reduce time-to-market.


The cloud has long since arrived in German companies, replacing common on-premise systems and shifting a large number of applications and processes to server farms and data centers of corresponding providers. Large volumes of data for SMEs can be managed via the cloud network - not only from the stationary workstation computer, but from a variety of different end devices. Smartphones, tablets, notebooks and special hardware gain access to important data and applications from anywhere in the world. Cloud services, however, require a certain amount of advance planning on the part of the SME. In order to make the use safe and successful for all parties involved, it is advisable to work with a migration partner. Migration saves costs, as the entire cloud infrastructure is located with the provider, thus also eliminating the need to operate and maintain servers. The required cloud storage is calculated according to a pay-per-use model and only booked and paid for what you actually need.

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