Cloud Computing: Looking Beyond the Initial Cost Savings

The potential cost savings achieved when moving to cloud computing is a well-documented value proposition promoted by cloud vendors. The quickest way (and most common) to understand the immediate financial benefits of a move to cloud computing is running a Total Cost of Ownership (TCO) calculator or model.  Savings tend to be wide ranging and are generally defined by four IT-focused attributes: Servers, Storage, Network and IT Labor.

Brookey & Company Cloud Computing: Looking Beyond The Initial Cost Savings

Models may reflect savings anywhere from 7% to 60% (or more) depending on current architecture and infrastructure. These purported savings often yield very attractive opportunities for CAPEX and variable expense reductions that businesses simply can’t afford to ignore.

Senior Executives and IT Leaders must consider additional factors beyond TCO savings when making the decision to move to Cloud Computing. Businesses considering a move to cloud computing should adopt an approach that includes a strategy-based cloud adoption framework and a supporting business case.

The Cloud Adoption Framework must address the multifaceted impacts to Finance and Cost Management, Governance, Operations, Service Management and other factors while maintaining business and IT strategic alignment.  Cloud economics factors are wide ranging depending on industry verticals, and can include

  1. Ability to meet and exceed mission critical application performance needs,
  2. Vendor Scalability and Flexibility,
  3. Security requirements,
  4. Contract and Service Level Agreement terms,
  5. Balancing IT operational “wants” with financial realities.

Managing cloud services can be a significant change from the processes used to manage an organization’s current IT operations. Organizational and operational impacts to the business, IT and customers are essential elements in the adoption framework planning process.  

Our discussion with clients and cloud vendors indicate a great deal of uncertainty still exists surrounding where to begin strategically planning a cloud transition. Faced with mandates to reduce IT spend, cloud adoption strategies must counterbalance transition and operational risks to both IT and the business. When making the decision to move applications to cloud computing, Senior Executives and IT Leaders must look beyond the initial cost savings and fully understand the potential business impact.

Brookey & Company uses a multi-step, phased cloud adoption framework to plan and execute cloud strategies that capture cost savings, manage risk and keep Business and IT aligned. You need a trusted advisor to help you plan and execute your journey to the cloud. Contact us today at . You’ve been on the sidelines long enough, it’s time to get in the game.