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How Cloud Computing helps cut costs, boost profits

Thor Olavsrud | March 13, 2013
The decision over whether to move your organization's IT to the cloud can be a daunting one.

Calculating Cloud ROI

When you set out to calculate your cloud ROI, Paul Croteau, an enterprise solution engineer at Rackspace, says you'll need to consider factors that are relevant to your enterprise application portfolio and specific computing needs.

First, Croteau says, your ROI analysis should take into account broad considerations like cost per unit of computing power, the tradeoff of the amount of labor necessary to redesign applications that need to operate in a cloud environment and intangibles like time.

"Moving to the cloud also adds new factors into the ROI equation that require thinking beyond the realm of items like capital acquisition, licensing of software and depreciation," Croteau says. "For example, users only pay for what they use with a cloud platform, and you can see exactly what the power is costing you through the transparency of a cloud provider's interface. Another prime cost benefit of the cloud's economy of scale is the ability to scale up and down quickly, across a number of investments."

"Cloud computing can create a significant return on investment, affording energy, licensing and administrative costs, and it frees up capital and personnel to innovate on new ideas quickly," Croteau adds. "Moving to the cloud is a transformational investment, in every sense of the word--but it's a move that many of today's organizations find compelling."

Building a Cloud Roadmap

CDW offers the following recommendations for building your cloud roadmap:

Tap a cross-section of your stakeholders for a thoughtful analysis of benefits and costs, and then select a cloud strategy consistent with your IT service fulfillment model.

Launch first with services that don't pose unacceptable risks to your organization, aren't business critical and where complexity of implementation is low (storage, unified communications and office productivity apps, for example).

Leverage your user's familiarity with consumer cloud offerings to maximize the success of cloud adoption.

Independent software vendors will bring new features to market faster with cloud applications, so follow those changes closely.

Start planning today; understand your internal "cost to serve" per application, which will help determine ROI for public cloud solutions.

When working with cloud providers, look for contracts that establish and enforce service levels and security standards.

Work with a software licensing expert to clarify and resolve issues affecting applications your organization wants to move to the cloud.

 

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