“Shoot for the moon. Even if you miss, you’ll land among the stars.” – Les Brown, motivational speaker and talkshow host
I’m sure Les Brown is a lovely man. I’m sure he is truly sincere. But for those of us who are risk-averse, the sentiment is painfully off the mark. If I understand gravity properly, you won’t land among the stars at all. You’ll spend all eternity floating rudderless through a surreal world where you can’t accomplish anything. All because you took the risk while deluding yourself about the result.
Speaking of risk, reward, and heavenly bodies, let’s turn our attention to that most magical of celestial spaces: Cloud Computing.
What is cloud computing?
As defined by the U.S. National Institute of Standards and Technology, cloud computing is “a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g. networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.” That’s a fancy way of saying that you get a whole bunch of great IT stuff for (relatively) little cost and effort. Maybe that’s why, according to a 2011 survey by analyst firm Ovum, 45% of multinational companies are using cloud computing.
It all sounds great. The benefits can be very real – and very significant. But is it the panacea that some cloud evangelists might have you believe? Well, maybe. Like any other expenditure, you need to investigate before you invest.
Do I recognize an ROI?
In the white paper “Calculating Cloud ROI: From the Customer Perspective,”. ISACA, an industry thought leader in IT governance, management, and security, argues that it’s short-sighted to rush into the cloud under the assumption that it is a low cost-of-entry, rapid return on investment proposition. ISACA asserts that at best this view could fail to account for the long-term cost of operating in the cloud – and at worst, that it doesn’t explore hidden costs that could negatively impact ROI.
What to do? Quantify the value of your return as much as possible before you make a decision. Identify all potential costs, both expected and unexpected, and do your best to put a value on both the tangible and intangible benefits for the fairest assessment of cloud solutions.
ISACA offers a sound framework for calculating simple ROI. I won’t bore you with the math (because I’d likely botch it up), but it takes into account the real-world challenges you could face, along with the tangible and intangible benefits you stand to gain. And there’s a solid breakdown of upfront, recurring, and termination costs that can help you get a real picture of your prospective cloud investment.
So go ahead and shoot for the cloud – if you’ve done your homework that should be exactly where you land.