Most IT managers already know that the Cloud provides advantages that, leveraged appropriately, can reduce the total costs of an IT service. IT organizations typically see a reduction in operational expenses associated with using a Cloud service. Because the Cloud host provides the same service to multiple "tenant" users, they can realize "economies of scale" to support many more users, at a much lower per-user cost.
At the same time, the IT organization avoid purchasing new IT infrastructure - which they would need to support the service on their own. And that means no server administration, no operating system, no patching, no software upgrades. That's all managed by the Cloud. Sure, local IT still provides user management, but that tends to be a very small part of the total effort.
'Twin Cities Business' discusses Cloud in their article, Cloud Confidence. The article starts with 2nd Wind Exercise Equipment needing to upgrade its mail server, and choosing Cloud: "Why buy new when Cloud computing will do?"
It's a good read.