Cut Costs By Moving to the Cloud

Lindsey Nelson

In this uncertain market, you’re not alone in trying to cut costs – as the widespread shift from on-premise to on-demand solutions would seem to indicate. Cloud’s affordability has become as attractive as the productivity upswing it offers.

According to a recent edition of the Issues Monitor – Technology published by KPMG, one major factor contributing to this trend is the slashed IT budget:

“Many research firms suggest that there might be a slowdown in the growth of enterprise IT spend because of the postponement of IT spending decisions and delay in decision making process…”

Because on-demand solutions offer simple, quick deployment, intuitive adoption, and faster ROI, they contribute to the sought-after IT cost savings that seem to be at the forefront of adopters’ minds. Check out the current practices that bolster this trend:

Cutting the on-premise strings

One of on-demand software’s most coveted features is the lack of up-front implementation and training costs that are usually associated with on-premise installations.

Even the White House is making the migration. The Obama administration drafted plans in November 2011 to accelerate cloud adoption – pushing federal agencies to adopt on-demand solutions in order to reduce spending and increase IT efficiency.

Maximizing customer value

Look at where companies are allocating their on-demand spend: customer relationship management. With a reported $3.8 billion in revenue, CRM accounts for the largest share of on-demand purchases. These investments are driven by the need to improve customer loyalty management and retention – highlighting a fiscally conscious strategy that it’s more economical to cultivate loyal customers than to constantly find new ones.

Hunting for bargains

On-demand providers understand the economical aspect of on-demand software’s popularity as well –as evidenced by the full-fledged price war that’s raged for the past two years. Microsoft went so far as to offer free software, running the program “Cloud CRM for less,” from August 2011 to March 2012 – waiving premiums for their on-demand CRM solutions to entice participating companies make a switch.

While enterprise IT spend lags due to the burden of up-front costs and slow-moving decision making that hampers profits, on-demand adoption is thriving in this new cost-conscious environment. Read more here.

About Lindsey Nelson

Lindsey Nelson currently supports Content and Enablement at SAP. Prior to her current role, she was responsible for Thought Leadership Content Strategy and Pull Marketing Strategy at SAP.