The following subsections describe a number of compelling reasons to move operations toward cloud computing.

Small Initial Investment and Low Ongoing costs

Public cloud computing can avoid capital expenditures because no hardware, software, or network devices need to be purchased. Cloud usage is billed on actual use only, and is therefore treated more as an expense. In turn, usage-based billing lowers the barrier to entry because the upfront costs are minimal. Depending on the contract being signed, most companies can terminate the contract as preferred; therefore, in times of hardship or escalating costs, cloud computing costs can be managed very efficiently.

Economies of Scale

Most development projects have a sizing phase during which one attempts to calculate the storage, processing power, and memory requirements during development, testing, and production. It is often difficult to make accurate estimates; under-or overestimating these calculations is typical. The lead time for acquiring the equipment to support these estimates can sometimes be lengthy, thus adding to the time necessary to complete the project. With the flexibility that cloud computing solutions offer, companies can acquire computing and development services as needed and on demand, which means development projects are less at risk of missing deadlines and dealing with the unknown.

Open Standards

Some capabilities in cloud computing are based on open standards for building a modular architecture that can grow rapidly and can change when required. Open source software is defined as computer software that is governed by a software license in the public domain, or that meets the definition of open source, which allows users to use, change, and improve the software. The flexibility to alter the source code is essential to allow for continued growth in the cloud solution. Open source software is the foundation of the cloud solution and is critical to its continued growth.

Sustainability

CSPs have invested considerable expense and thought into creating a resilient architecture that can provide a highly stable environment. Traditionally, companies have periodically struggled to maintain IT services due either to single points of failure in the network or to an inability to keep pace with business changes in both volume and the nature of transactions. Cloud computing allows companies to rely on the CSP to have limited points of failure, better resilience via clustering, and the ability to invest in state-of-the-art resilience solutions.