Research: Cloud ROI
Cloud ROI: Calculating Costs, Benefits, Returns
Think that sneaking feeling of irrelevance is just your imagination? Maybe, maybe not. Our April 2010 InformationWeek Analytics Cloud ROI Survey gave a sense of how nearly 400 business technology professionals see the financial picture shaking out for public cloud services. One interesting finding: IT is more confident that business units will consult them on cloud decisions than our data suggests they should be.
Fact is, outsourcing of all types is seen by business leaders as a way to get new projects up fast and with minimal miss, fuss and capital expenditures. That goes double for cloud services. But when you look forward three or five years, the cost picture gets murkier. When a provider perceives that you’re locked in, it can raise rates, and you might not save a red cent on management in the long term. In fact, a breach at a provider site could cost you a fortune—something that’s rarely factored into ROI projections.
In our survey, we asked who is playing the Dr. No role in cloud. We also examined elasticity and efficiency. Premises systems—at least ones that IT professionals construct—are always overbuilt in some way, shape or form. We all learned the hard way that you’d better build in extra, since the cost of downtime to add more can be significant. Since redundancy creates cost, we asked about these capacity practices, flexibility requirements, key factors in choosing business systems, and how respondents evaluate ROI for these assets.
Your answers showed us that adopting organizations aren’t nearly as out to lunch as cloud naysayers think. In this report, we’ll analyze the current ROI picture and discuss what IT planners should consider before putting cloud services into production, to ensure that the fiscal picture stays clear. (May 2010)
Survey Name: InformationWeek Analytics Cloud ROI Survey
Survey Date: April 2010
Region: North America
Number of Respondents: 393
Table of Contents
4 Author’s Bio
5 Executive Summary
6 Research Synopsis
7 Stay Loose
9 Change Is Coming. How Will You React?
10 Risk/Reward
13 Stay Engaged
15 The Efficiency Factor
17 Get That Stretch
20 Spending Spree? Not Hardly
22 Stay Loose
26 Visual Case Study: Cost Projections Over 5 Years
27 Time Is Not on Our Side
30 Appendix
About the Author
Jonathan Feldman serves as director of information technology services for a city in North Carolina. The city has won several technology innovation awards during his tenure, including the International Economic Development Council New Media Award. He has also directed professional services in the private sector, providing security and network infrastructure services to the military, healthcare, financial services and law enforcement markets.
Jonathan has worked for 20 years in the fields of IT security, reliability and human resources management, and has written, taught and consulted extensively on these topics, notably as co-author of Maximum Security and author of Teach Yourself Network Troubleshooting. His writing, which readers call “funny and easy to read,” has been translated into many different languages. As an award-winning Network Computing and InformationWeek contributing editor, he has worked with dozens of public- and private-sector organizations to document real business benefits, risks and appropriate governance of new technologies and surrounding practices and procedures.
A speaker at regional and national venues, including Interop, PC Expo, CNet Radio, The Institute of Internal Auditors and for the United States Army, Jonathan has been active in the community with organizations such as Infragard and GMIS International. He holds an MS degree from Georgia Tech.
Write to him at jf@feldman.org.
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Thread View | Flat View | 4Comments |
 Beyond the CloudComment by cfearnley570 Jul-02,2010 10:09:06 AMI was inspired by this article and blogged "Beyond the Cloud: The Comprehensive Flexibility of FOSS May Bring Clearer Skies" at http://blog.remoteresponder.net/2010/06/29/beyond-the-cloud-the-comprehensive-flexibility-of-foss-may-bring-clearer-skies/Reply |
It Depends.....Comment by buckeyecal Jun-25,2010 1:22:48 PMGuess like all "new" ideas, with cloud use "it depends" on many things, but from my view the greatest criteria is how it helps the enterprise meet their customer expectations. If doing it in the cloud permits greater integration, easier access, and a more centralized organizational view of the business, then it may prove valuable. But a premises solution can also meet those needs if the vision of the management team support it. In other words, it depends on more than meeting an IT need... it should be how can whatever solution increase the customer experience which in turn will create higher profitability, stock value and longevity.Reply |
Skewed sampleComment by rwarren204 Jun-25,2010 11:43:20 AMI don't question the findings for this sample: I question the constituancy of the sample and relevance to the issue which, I believe, have skewed the findings.If the stated purpose of the survey was to determine the extent of ROI analysis germane to cloud computing initiatives, much of the sample population would be totally out-of-the-loop on such analyses and therefore irrelevant to purpose of the survey. Specifically, 25% of the population was categorized as IT/IS staff. While 40%+ of the population were senior staff or executive management, there wasn't one single CFO represented (by title). More than 30% of the companies were under $100M in revenue, suggesting that only top management and executives in that population segment probably ever see an ROI calculation, much less prepare them.Don't get me wrong, this is an interesting read. I'm just not convinced the survey is well enough done based on the population sample to support decisive findings.Reply |
 what it really isComment by ANON1236183520505 Jun-08,2010 1:15:00 PMLipstick on a pig, the new "hype" in technology....Reply |
