Pay Offs and Risks of Capital Investments

Capital Investment Risks

Capital investments: Cloud computing for public universities

Cloud computing has many advantages over traditional, hardware-bound computing. "In the current financial crisis and being challenged by growing needs, universities are facing problems in providing necessary information technology (IT) support for educational, research and development activities" (Mircea & Andreescu 2011:1). Public universities have been particularly hard-hit financially because of their reliance upon state funding. States are struggling to provide the bare minimum of services for residents, while facing reduced revenue from state income taxes, sales taxes, and other sources of funding. Switching to cloud computing could be both financially and technologically advantageous for residents. Also at "the moment universities are confronting with a dramatic increase of costs in higher education, more than the inflation rate" because of increased enrollment that is unlikely to abate, even after the financial crisis becomes less serious (Golden, 2010). The decrease of universities' budgets has also been accompanied by an increased need to integrate technology into the classroom (Mircea & Andreescu 2011:2).

Investing in cloud computing will be advantageous for college students because it allows for students to more easily engage in cooperative learning, such as communicating with one another on blackboards and in chatrooms over mobile devices. They can even connect with the university on their laptops while commuting, as well as from work or from school. It also makes the university more efficient. Students can access resources such as articles and even scanned books and eBooks from other institutions by connecting to universities that are all linked by the same 'cloud.' Although many of these options are offered presently, "cloud solutions…offers many benefits to e-learning solutions by providing the infrastructure, platform and educational services directly through cloud providers and by using virtualization, centralized data storage and facilities for data access monitoring" in a manner that can offer significant cost savings (Mircea & Andreescu 2011:2).

For universities on a budget, "cloud computing is probably the most cost efficient method to use, maintain and upgrade…Adding up the licensing fees for multiple users can prove to be very expensive for the establishment concerned. The cloud, on the other hand, is available at much cheaper rates" (Viswanathan 2012). Cloud computing allows public universities to remain on the cutting edge of technology yet still remain within budget. Data storage is unlimited and there are proven successes of other universities being able to save money, thanks to their use of the cloud. North Carolina State University's introduction of cloud computing allowed it to save money on licensing and reduce the campus IT staff from 15 to 3 employees because the university could maintain its own data centers (Mircea & Andreescu 2011:3). The reduction of IT staff is possible because "most cloud service providers are usually competent enough to handle recovery of information. Hence, this makes the entire process of backup and recovery much simpler than other traditional methods of data storage" and "in the cloud" software integration of different systems and applications "is usually something that occurs automatically" (Viswanathan 2012).