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The Cloud Computing Model Brings Significant IT Cost Savings, According to Research

October 30, 2014

By Tracey E. Schelmetic,
TMCnet Contributor

When cloud-based contact center systems were first introduced, the early adopters were looking for ways to be more agile with customer service. These solutions allowed them to be flexible in using distributed agent pools and home-based agents. Today, more and more companies are moving to the cloud model, and there is evidence that cost is the major driver for these switches.

Premise-based contact center systems are expensive to implement, maintain and update. Companies have found that shortly after shelling out big bucks for a premise-based system, they were continually saddled with costs for upgrades and updates for a system that was rigid and often limiting. They needed to maintain expensive in-house IT services simply to maintain them. Thanks to the move the cloud, these same organizations are finding cost savings realized not only in upfront purchases involving large amounts of capital, but also in maintenance and troubleshooting. Add in the costs of data analytics – critical to optimal call center operations today – and premise-based systems are simply becoming too costly for all but the largest and most profitable companies.

A recent Frost & Sullivan (News - Alert) report detailing the cloud contact center marketplace in Australia has found an average IT cost savings of 12 percent through the use of cloud computing services. Couple this with the upfront costs saved in the purchase price of the solution, and the savings are significant.

The report, entitled “the State of Cloud Computing in Australia Report 2014,” revealed that the Australian cloud computing market has now emerged from the early adopter stage to the early growth stage of adoption by the wider market. However, while strong growth in cloud adoption continued into 2014, it will begin to taper off as the market reaches a higher state of maturity. The Australian cloud computing market is expected to grow strongly over the next five years, averaging a compound annual growth rate (CAGR) of 30 percent from 2013 to 2018, when it is forecast to reach $4.55 billion.

There is also evidence that cloud adoptions are helping companies be more nimble and serve their customers better.

"Two thirds of companies that have adopted cloud services believe it has significantly improved their overall business performance,” according to Phil Harpur, Senior Research Manager for Australia & New Zealand at Frost & Sullivan. “A significant proportion of organizations feel it has enhanced their ability to innovate and explore new business models. The Education, Mining and in particular, Government and Financial Services, have been strong adopters of cloud over the last six to 12 months. The Retail and Manufacturing sectors are seeing strong adoption of cloud based business management applications," said Harpur.