Chad Swartz, senior manager of IT operations at the , spent most of the year planning disaster recovery and ended up with a big cost-saving strategy for the Chicago-based firm.

Preferred, which specializes in group-travel sales, booking conventions, conferences and corporate outings into its network of luxury hotels, is moving its relatively tiny data center into the cloud.

The company signed up earlier this year for , a hosted server-and-software service from . Under the plan, will supply 10 virtual servers-seven on full-time duty and three in reserve for spikes in demand-each with a pre-configured amount of disk space, memory and processing power, as well as a set amount of bandwidth, Swartz says. Actually, Terremark will supply double that eventually; one set for the production environment and an identical one that is physically located in a different Terremark data center, as a disaster-recovery hot site.

The service will cost about US$16,000 per month for the whole kit-and-kaboodle. That compares favorably to the $210,000 Preferred was going to have to pay to refresh its aging servers this year, plus $10,000 per month in co-location and bandwidth fees, Swartz says.

"Everyone is checking their budgets now," says Swartz. "If you go to the board, is it an easier sell to say we need to spend $200,000 in capital costs and $10,000 a month? Or just pay a $10,000 implementation cost and $16,000 per month? The cloud environment is going to explode, if just for the cost savings."