Moving to the Cloud and Understanding ROI

There's always a good reason to move to the cloud; right? Now, find out how use-case can mean everything and the need to better understand your cloud ROI.

Bill Kleyman

May 22, 2015

5 Min Read
Moving to the Cloud and Understanding ROI

No longer just a general buzz term, cloud computing has established itself as a real technology with various uses. In fact, Cisco reports that global data center traffic is firmly in the zettabyte era and will triple from 2013 to reach 8.6 zettabytes annually by 2018. A rapidly growing segment of data center traffic is cloud traffic, which will nearly quadruple over the forecast period and represent more than three-fourths of all data center traffic by 2018.

Adoption rates are increasing as more organizations turn to a truly distributed infrastructure model and use more WAN-based tools. As underlying hardware components become better and more bandwidth becomes available, cloud computing has become a solid consideration for a wide array of industry verticals. Everyone should be either adopting it, or at least considering it… Right?

In having numerous conversations with different customers using various technologies – there’s still very active conversations around cloud computing. However, these conversations are changing. Managers aren’t really asking what the cloud is – now, they’re curious to where they can actually apply it.

“There is a flawed perception of cloud computing as one large phenomenon,” said Chris Howard, research vice president at Gartner. “Cloud computing is actually a spectrum of things complementing one another and building on a foundation of sharing. Inherent dualities in the cloud computing phenomenon are spawning divergent strategies for cloud computing success. The public cloud, hybrid clouds, and private clouds now dot the landscape of IT based solutions. Because of that, the basic issues have moved from ‘what is cloud’ to ‘how will cloud projects evolve’.”

The cloud is everywhere

Let’s take the word “cloud” and break it down quickly. The term really just means data distribution over the WAN. This can be a private, public or hybrid model. Because of the massive presence of the Internet, most organizations are already using the cloud without even knowing it. The difference is that they’re utilizing cloud computing components within their means and needs. This means that they are not using more than they require and truly just utilize basic components of the Internet.

On the other hand, some organizations keep a completely localized environment and only use WAN-based technologies to share files, store backups, or host sites on the Internet. Really, all of these technologies were available before “cloud” became popular. Because of this, administrators are asking, “Why do I need more when I already have so much?” The answer may be very simple – depending on the industry, they may be quite right.

Understanding ROI and Use-Cases

There are distinct advantages to moving to a cloud model.

  • Disaster Recovery

  • Backup and Storage

  • Testing and Development

  • Easier Management

  • Data Center Consolidation

  • Enabling Mobility

  • Offloading Security

  • And so on…

Let me give you two specific examples around ROI:

  • There was a recent study conducted by the International Working Group on Cloud Computing Resiliency. This report showed that since 2007, about 568 hours were logged as downtime between 13 major cloud carriers. This has, so far, cost the customer about $72 million. In DR alone – a cloud model might absolutely make sense for you and present an excellent ROI.

  • Similarly, a recent Ponemon study looked at data breaches. Breaking a downward trend over the past two years, both the organizational cost of data breach and the cost per lost or stolen record have increased. On average the cost of a data breach for an organization represented in the study increased from $5.4 million to $5.9 million. The cost per record increased from $188 to $201. By moving a workload to a secure, cloud-hosted architecture, you can reduce the chances that sensitive data might leak. After all – looking at pretty much all of the major breaches that have happened recently – none of them happened within a major cloud provider.

Although these examples are great – there is a challenge here as well. Too many organizations got caught up in the hype of the cloud conversation without really doing a true cost/benefit analysis. This can involve several business stakeholders, interviews with internal and external resources, and a clear vision for where the organization is going. Instead of jumping on a technological bandwagon, organizations should take the time and understand where a given technology fits in with their business strategy.

In some cases, a certain type of cloud model is just not the right fit. Whether it’s cost prohibitive or it just doesn’t provide any additional benefits – cloud computing can deliver a ROI or it can be a hindrance.

Where use-case become everything

I’m not saying to be complacent. Complacency in IT can ruin an organization or a career. In the case of cloud computing, it may be the right move to wait on the technology. The advice is simple: Take the time to understand the cloud model and how it fits your business.

Just like any technology, there will be benefits and challenges. In some cases, moving to the cloud may just not be conducive to the goals of the organization. It’s quite possible that a company has no intention of expanding, or moving their infrastructure to the Internet. Or, there may not be a need to offload workloads into the cloud. Also, there may be other good technologies to help deliver data and content to the end-user.

The bottom line is this – the cloud model has a powerful presence and many organizations are adopting some part of the technology. But like any tool, piece of software or technological advancement, there needs to be a fit.

About the Author(s)

Bill Kleyman

Bill Kleyman has more than 15 years of experience in enterprise technology. He also enjoys writing, blogging, and educating colleagues about tech. His published and referenced work can be found on Data Center Knowledge, AFCOM, ITPro Today, InformationWeek, NetworkComputing, TechTarget, DarkReading, Forbes, CBS Interactive, Slashdot, and more.

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