Over the past twenty years, it has been commonplace for businesses of all sizes to invest more heavily than ever in technology in order to keep their organisation modern and maintain a competitive edge. 

As the internet and the world’s reliance on digital communications and transactions have increased, so has the amount of money and space that companies have allocated towards it. Over the past few years however, we have begun seeing businesses trending away from purchasing expensive, powerful servers and computers for their employees.

Thanks to developments in cloud computing, companies are progressively realising that they are able to maintain the same level of computing power and resources without the costly acquisition of technological equipment which was needed just five years ago.

By outsourcing their storage and processing needs, these firms are not only able to save money by avoiding the need to modernise their equipment every couple of years, but they are also finding that reducing their in-house technology needs is lowering the amount of office space which is required to be allocated to its housing.

Freeing Office Space and Saving Money

Many businesses that have increased their reliance on cloud computing in recent years have been able to totally eliminate their need for in-house servers. Even with non-technology based firms, that can equate to a significant savings of space. In companies whose main business revolves around computing and the internet, the office area they are able to clear through cloud computing often ends up being a substantial portion of their office expense.

With the steady recovery of the worldwide real estate market since the collapse in 2007, companies have seen the rental prices on their office space steadily rising. In more competitive markets such as New York or San Francisco, firms can easily be spending $50/SF or more on floor space.

By outsourcing their computer needs, many companies have been able to relocate into smaller office spaces or allocate the areas previously used for computing into more workstations for employees. This is allowing these firms to grow, without the costly need to increase office size.

Flexibility in Work Locations

In addition to the newfound freedom of space in the office, many companies are finding that operating satellite offices or simply having employees working in different locations has become much simpler. Many firms with a heavy reliance on technology have traditionally found that having employees away from the home office meant huge up-front investments in space and equipment in the employees’ locale.

By moving their processing and storage needs into the cloud, this allows many workers to be able to work from home or less expensive office solutions, as well as reducing the initial equipment cost of opening a satellite location.

These firms also found that they are able to save additional money by removing the need to purchase high-end workstations for their employees. Projects which employees may have needed a $3,000 personal computer for just a few years ago can now easily be completed with a basic laptop or even tablet thanks to the remote processing and storage power of the cloud.

Coupling this with the bonus of collaboration the cloud offers – projects can involve team members from all over the world, working on a centrally stored project more easily than ever – many companies are seeing huge increases on their bottom line thanks to the reduced need for office space.

With the development of cloud computing still being in an early stage, we can expect to see an increased reliance on this new technology over the next few years. With even small to medium companies being able to reduce the space that they need in their offices – both home and satellite – many are already realizing savings of tens or hundreds of thousands of dollars annually. As the trend continues and the technology advances, companies may find their reliance on cloud computing growing exponentially .

Lewis Edward is one of the owners of The Office Providers. He is a real estate investor and entrepreneur and his company provides any kind of office space including virtual offices.

We, at Microsoft, are happy to announce ‘Talking Business’ to help entrepreneurs and business owners’ succeed. We believe in your ability to innovate and in the ability of technology to help, so to support ‘Talking Business’ we have many resources available for businesses like you. We have an informative newsletterblog posts by people in the industry, and a community looking to help small business succeed.

Follow us on twitter - @MicrosoftSB, or use the hashtag #TalkingBusiness to find out more information.