When utilizing clouds as an IT service there is a complex method for figuring costs and a growing fear that those costs are going to severely cut into your bottom line. Though these types of services are becoming an inevitability, creating and managing them as an organization could be a nightmare. So they are outsourced to IT professional who can manage and monitor them.
Lorna Garey, content director of InformationWeek Reports explains the challenge many organizations face when dealing with cloud technology:
“Companies that cannot compare costs for public cloud services versus internal IT will be in rough shape once they build private clouds and adopt a hybrid setup,”
“And just avoiding cloud won’t be an answer, if enterprises don’t want a stark IT cost delta between them and startups.”
Jonathan Feldman, author of the study, explains a little more about the confusion in calculating ROI:
While there’s an air of inevitability around cloud computing, the ROI calculation has stayed in flux. A lot depends on whether we’re talking SaaS, PaaS or IaaS; some are easier to wrap your arms around than others. Because of SaaS’s very granular cost methodology, it’s actually pretty straightforward to calculate investment and who benefits, and thus peg return on investment. For example, especially for commoditized enterprise applications like email, it’s fairly trivial to figure out how much personnel, storage, servers, software and licenses cost to come up with a per-seat price for in-house email. Then you can compare apples to apples.
Here’s some findings from InformationWeeks’s report:
* 82% of our survey respondents have or expect a formal mandate or a preference to evaluate cloud computing as an option for any new IT services or systems.
* 60% are concerned or very concerned over the potential for runaway costs if cloud services scale up inappropriately, whether due to error, mismanagement or an attack such as DoS.
* 31% say it’s highly likely they will comprehensively evaluate ROI for the expected lifespan of a cloud computing project; 54% of those likely to evaluate their return on investment will use a three- to five-year time period for comparison.
* 27% report incorporating time savings for business unit employees or IT staff has a high likelihood of being included in an ROI study regarding the business value of cloud computing.
The survey information is based on responses from 374 participants in InformationWeek’s Cloud ROI IT survey for 2012. Hopefully these results shed a little light on subject for those who are making decisions about the right ways to invest in cloud technology.