Determining the Real Value of Cloud Computing

Now that cloud computing is in the mega-hype stage there are continuous attempts to define the true value of cloud computing for enterprises and government. Most of the time we talk about capital expenses versus operating expenses, and sometimes the concept of agility, including the elastic nature of cloud computing. So how should you evaluate the value of cloud computing in the context of your enterprise?

The truth of the matter is, there are no hard and fast formulas we can leverage to compute the exact dollar benefit of any new type of technology application, including cloud computing. However, there are many aspects of this new model to consider to help determine the real value of cloud computing:Self improvement is the value of taking a new look at your existing IT solutions. One of the things that cloud computing forces you to do is to examine your existing IT architecture and determine what works and what does not. Then, create a plan to improve upon it as you relocate aspects of the existing architecture to the cloud. The value here is an improvement on the existing way things are done as you move from platform to platform.

This value will be a apparent no matter if you move to a cloud platform or not. We'll see many who brag about how the new cloud computing deployment is such a success and a cost saver, when the core value is really around the improvement in the architecture and not the movement into the cloud. However, I'll still count this as a true value of moving to the cloud.

Agility is the ability to change your IT solutions to better react to the needs of the business. The value of agility is nothing new; the degree of value will vary greatly from enterprise to enterprise. Cloud computing provides you with the ability to adjust solutions as the business or mission changes, allowing IT to scale up or down, and to do so in almost direct proportion to costs. Moreover, you can more quickly adjust by leveraging the cloud considering that purchasing hardware and software, as well as integration, has been factored out of the equation.

Time to operations is the ability to quickly get something up and running to meet the needs of the business. Related to agility, but not exactly the same, time to operations is the ability for IT to determine on Monday that we need additional storage to support a particular application, and they will have that storage system up and running in the cloud on Tuesday. Or, the ability to leverage Google App Engine to build an application to meet a business need, without having to wait for the hardware and software to be delivered and installed.

Finally, it's the ability to leverage a SaaS player, such as Salesforce.com or others, rather than go through the pain and expense of implementing an on-premise enterprise software package, most of which are famous for taking more time and money than originally expected.

Notice that I've yet to mention capital expenses or operational expenses, which are innate to the values described above. I assume that you focus on self improvement, agility, and time to operations as the core value of cloud computing. You'll find that these factors serve you better in making a business case for cloud computing. They are the true values of the cloud.We could talk about capital expenses versus operating expenses or the concept of agility, including the elastic nature of cloud computing. So how should you evaluate the value of cloud computing in the context of your enterprise?