HomeCLOUD COMPUTINGHow Can Cloud Computing Help Reduce Data Center Costs?

How Can Cloud Computing Help Reduce Data Center Costs?

Anyone aware of the market knows that Cloud Computing and Virtual Data Center technology has assumed an increasingly strategic role in companies of all sizes, especially at the start of the IaaS Era  (Infrastructure as a Service).

And this does not happen by chance: if they are well implemented and aligned with business strategies, Cloud Computing and Virtual Data Center solutions can positively impact a company’s processes and operations, generating great benefits such as productivity gains, increased performance, and cost reduction.

Do you want to know how Cloud Computing and Virtual Data Centers can contribute to expanding your business? Keep reading!

Understanding Cloud Computing And Virtual Data Centers

The term Cloud Computing refers to a set of cloud-based technologies. The cloud, in turn, is a service that allows remote access and storage of data, files, and applications. The Virtual Data Center was based on this concept to deliver what we call IaaS (Infrastructure as a Service), where companies can assemble their entire data center through a control panel in the cloud, completely forgetting the concept of data centers and physical machines.

You already use Cloud Computing daily when you carry out financial transactions from your cell phone, access a file in an online repository, or watch movies on Netflix, for example.

Where Costs Are Reduced

It is essential to understand that, with the Virtual Data Center (or VDC – Virtual Data Center ), servers, storage, switches, and routers are no longer stored in local or physical data centers (vault room model or co-location, for example) and start operating in the cloud, protected by strict security measures. It completely changes the concept of purchasing physical equipment (CAPEX) to a monthly recurring subscription (OPEX), but we’ll talk more about CAPEX x OPEX below.

When a company chooses to maintain a physical data center (vault room or co-location), it needs to invest in a series of operational and infrastructure issues, such as:

  • acquisition of servers, equipment, and technological solutions;
  • hiring specialized professionals to maintain and manage the entire physical infrastructure;
  • purchase of software;
  • electricity costs;
  • buy or lease of physical space;
  • among other examples.

The Virtual Data Center solution, on the other hand, is sold as a service and tailored according to each client’s specific needs. You will only pay for the computational resources used (storage, memory, CPU, and bandwidth), similar to water or electricity bills.

In addition, the management and maintenance of infrastructure, monitoring, and technology updates are no longer tasks of your IT team and become the responsibility of the contracted cloud provider. Your company must remember that there is a physical environment behind it, as well as this infrastructure’s management and maintenance needs.

Did you notice how the Virtual Data Center reduces spending on equipment acquisition and infrastructure management? See more benefits of this technology for your business budget:


The Virtual Data Center solution is much more flexible than physical data centers, as they are highly scalable and allow you to expand or reduce the available computing resources whenever necessary.

Let’s say your business is preparing for the arrival of holiday sales. In the Virtual Data Center, it is enough to duplicate the computational resources in the control panel and reduce them again after the sales peaks pass, and consequently, the resource consumption peaks.

Such elasticity would not be possible in the case of a physical data center. To start, you would need to acquire new capital assets, such as servers and storage, to expand the entire physical infrastructure of your data center. In addition to the long delay and high cost to complete this upgrade, what would you do with the physical infrastructure already purchased after the peak period has passed? It would undoubtedly be idle, still having the cost to keep it active (rack space and electricity).

Cutting-Edge Technology

Every month more advanced and efficient models of IT equipment appear. Therefore, when a company chooses to maintain a physical data center, it is common for all its equipment to be obsolete within 3 or 4 years.

And in cases of businesses with seasonal sales peaks, expanding the physical infrastructure may not justify the high investment required, as the purchased equipment will fall into obsolescence as soon as sales cool down.

Therefore, it is possible to state that the Virtual Data Center reduces infrastructure expenses without reducing IT performance since you can use state-of-the-art technology at a much lower cost than if you maintain a physical data center.

Return On Investment

The implementation of the Virtual Data Center can be translated into the migration of CAPEX (Capital Expenditures) to OPEX (Operating Expenses).

That is, instead of investing in purchasing capital goods, such as state-of-the-art hardware and software, your company makes operating costs more flexible or even outsources services to ensure business continuity.

By cutting out investments for expanding and managing your company’s entire physical data center infrastructure, the Virtual Data Center can save up to 40% on your budget.

In addition, as your IT teams will no longer need to deal with physical infrastructure issues, there will be more time to focus on your business’s priority objectives, generating increased productivity.


Some IT managers are still hesitant to adhere to Cloud Computing and Virtual Data Centers, arguing that the cloud only guarantees some of the necessary security structure for corporate data. This is not true.

Just analyze a local data center: like any other company structure, it is subject to physical damage, problems arising from lack of equipment maintenance, natural disasters (floods and fires, for example), invasions, or even theft by third parties.

On the other hand, a Virtual Data Center is in a highly protected environment with stringent security standards. And as you already know, it is the contracted provider’s responsibility to guarantee the security of data and applications stored in the cloud, establishing the expected service levels already at the contract stage.

And even if there are problems in the infrastructure of your Virtual Data Center supplier, the cloud also allows Disaster Recovery (DR) to be carried out as a service — that is, the redirection to another data center, preventing your business operation from being impaired.

Also Read: Why Use Cloud Tools For Data Science?

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