TCO
5 Ways to Compute Cloud Computing ROI
Wednesday, May 26th, 2010 · No Comments »The future of IT is in cloud computing, but how do you explain that to the “C” level executives? This model uses two specific business metrics and 5 ways that you can explain the ROI of cloud computing to your boss or to the board:
• IT capacity – storage (GB or TB), CPU cycles (GHz or THz), network bandwidth (Mbs or Gbs), and/or memory capacity (RAM) a measure of performance.
• IT utilization – uptime availability (% available per year) and volume of usage (# of requests) as indicators of activity and usability.
Effective cost/performance ratios and levels of usage activity do not necessarily imply proportional business benefits. They are just indicators of business activity that are not in themselves more valuable than lower operating costs. What is needed instead is a set of business metrics that build on the cloud computing model.
The following are business metrics that can help translate the indicators from the capacity-utilization curve to direct and indirect benefits to business and examples of how a CAPEX is different than an OPEX in cloud computing:
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