Working with Google and Analysis Group, MIT research scientist Andrew McAfee recently conducted a study to understand the comparative costs of a business moving to the cloud versus remaining with a traditional on-premise IT system. In this comparative cost model, McAfee finds that the typical small- to medium-business (SMB) will significantly reduce its IT costs by doing away with its on-premise technology and moving to the cloud.

For example, a business with 16-100 computers can expect to save 37% by moving to the cloud – even if there’s no IT labor reduction. With savings achieved by moving to the cloud, these businesses are able to invest in areas that help expand or strengthen their business, whether it’s opening a new branch, starting a new product line, or hiring more people.

Bill Hipsher, Director of Business Development at confirms, "Over a one-year period, Google Apps cost one-quarter of what we were spending on our on-premise IT before moving to the cloud – and over our business lifetime, it drops to just one-tenth of the cost. The hardware, software and time savings helped us expand our call center, which led to the creation of more than 30 new jobs this year."

In his study, McAfee also notes that SMBs' technology use is a strong indicator for the future of IT. Because SMBs are more flexible in their decision-making and aren't bogged down by legacy costs, they're able to choose an IT system that best suits their business. Thus, moving to the cloud frees up money for SMBs to drive business and job growth, and can set a precedent for how large businesses adopt cloud technology.

At Google, we’re proud to work with SMBs across the country to help them save money and move to the cloud. Visit our website to learn more about moving your business to Google Apps and explore McAfee’s comparative cost model in Google Sheets to adjust and tailor the model to your business.