When it comes to talking up the benefits of cloud computing, cost savings and efficiencies are at the top of the list. The most common benefits of cloud apps and services are typically the CAPEX and OPEX (News - Alert) expenditures organizations are spared by not having to purchase and maintain expensive and complicated on-premise hardware and software. Not to mention the internal IT resources that are freed up from having to monitor and manage that equipment.

But what are the real tangible savings of migrating to the cloud? Cloud service providers, equipment vendors and data center and colocation providers talk a good game when it comes to convincing customers and partners of the myriad benefits of the cloud. But what can organizations realistically expect when they make the important decision to migrate some or all of their apps, services and network functions to the cloud?

According to a study from Rackspace Hosting (News - Alert), 88 percent of cloud users in the U.S. and U.K. report cost savings, while 56 percent say the cloud has helped them increase profits. And 62 percent of those queried have reinvested those savings to drive productivity within their businesses, including increasing staff, raising wages and supporting product innovation.

Other interesting findings from the Rackspace study include 56 percent of organizations report increasing their profits through cloud services usage, while 49 percent say they have grown their business by using the cloud. And 60 percent report that cloud computing has alleviated the burden on their IT teams to maintain infrastructure, freeing them up to focus on strategy and innovation. The cloud has also proven beneficial for new businesses, with 90 percent of companies started within the past three years reporting the cloud facilitated their startup. More than half of those queried said they wouldn’t have been able to afford the on-premise IT resources required to start their business, so the cloud was absolutely essential to getting off the ground.

“The study shows just what an important impact cloud computing is having on U.K. and U.S. businesses,” said John Engates, CTO of Rackspace. “It’s particularly interesting that, despite the ongoing economic backdrop, half of businesses on both sides of ‘the pond’ are actually increasing profits and growing their business through use of the cloud. This includes investing in headcount and wages as well as driving further innovation.”

A recent Forbes article backs up the Rackspace findings, focusing on how the U.S. government has saved time and money by moving to the cloud. The piece discusses how private company IQ Business Group (IQBG) scored a $53 million, eight-year contract with the Department of the Interior (DOI). The agreement integrates IQBG’s SaaS (News - Alert) platform with the department’s IT Transformation initiative, which is expected to save the DOI $100 million per year.

According to IQBG CEO Michael Beck, the contract is a significant move for the feds and points to increased spending on cloud and software-based services. Beck forecasts “a considerable increase in [government] spending on the cloud-based governance solutions, as there is pent-up demand, based upon success from early adopters – we expect to see more activity in this space.”