Slow Changing Industries Move To The Cloud and Save Money

Businesses hear how forward thinking and exciting it is to have a cloud within their business. It makes the business run smoother, clears up unwanted paper and files, and it makes the company look digitally modern. However, can the cloud save a business money or is it just another headache?

Rackspace is one of the top cloud companies in the marketplace today. Of the top 100, Rackspace ranks 9th just behind Google and Amazon. Rackspace offers both private and public clouds for individuals and companies. Their technology, similar to most other clouds, allows for instant syncing of data to their “cloud” servers, which can be accessed by a user or company. This allows the company or individual to organize all their information into one place that can be accessed anywhere. This sounds well and good, but can Rackspace, or any cloud, save a company money? In an interview with Ajit Melarkode, general management executive at Rackspace, he says, “the save overall for companies is converting capital expenditure into operating expenditure.” This means that a company is not spending any money on costly IT setup fees and procurement costs, they use a cloud vendor, like Rackspace, to administer and manage the cloud. The money that would have been spent on costly custom IT, can now be plowed back into the business' normal operating income.

So who has actually saved money moving their business to the cloud? Let's take a look at an industry that is very slow to change, construction. Webcor Builders is a general contractor who has big name clients like eBay & Lucas Films and have recently moved their business to the cloud. In an interview with Vince Sarubbi, Webcor’s CTO, he says, “we’re using [the cloud] for architectural drawings, for virtual building files, everything down to simple PDF’s…up to very large virtual building multi gigabyte files, through Box.com.” Webcor stores a ton of data in the cloud that they then can access later through their iPads. They use an app called PlanGrid that allows Webcor to view and edit all their virtual drawings anywhere on their iPads. Furthermore, this complete business integration allows Sarubbi to harness the important data, “its really in your costs, how you control costs… that’s your true data,” says Sarubbi. This is where Webcor understands the power of the cloud, being able to control costs efficiently and not just saving money with cheap setup costs.

What about the government? Are they able to save money with the cloud and make it cost effective? Recently, the Department of Interior awarded $10 billion dollars in contracts to accelerate their large transition to the cloud. Even though their migration has a costly price tag of $10 billion, they will be able to save even more money in the long run with their new cloud system. According to Andrew Jackson, not our 7th president but Deputy Assistant Secretary for Technology, Information and Business Services, “we expect to result in benefits of $100 million each year from 2016 to 2020.” Their goal is to make access to the public and DOI employees around the world easier and more efficient. “Our hosting environment, which currently focuses on managing servers in-house, will be able to transition to a modern cloud-based environment,” says Jackson.

Both Webcor and the Department of the Interior have embraced the concept of the cloud and understand its potential and both of them exist in an industry where change is cumbersome. However, the construction industry, other branches of government, and industries all over the world should look towards Webcor & DOI as a cloud guide. If construction and government can financially benefit from the power of the cloud, then there should be no excuse to transition to the cloud.