Calculating Cloud ROI

With the evolution of managed services, outsourcing, virtualization and broadband connectivity, cloud computing was inevitable. The acceptance at lightning speed may be attributed to its appeal as a low cost-of-entry and rapid return on investment (ROI) solution.

This view, however, may only consider the immediate costs of contracting and migrating
to the cloud and fails to consider the long-term costs of operating in the cloud and, worse, the hidden costs that could minimize the expected return. To add to the complexity, cloud computing encompasses a variety of service delivery and deployment models, ranging from public and community to hybrid and private clouds.

These services are offered by a variety of providers, each with different solutions and pricing models. One of the most difficult tasks for IT leadership is weighing the total cost of an IT service against its potential return. This challenge holds true (perhaps even more so) for cloud computing. A meaningful assessment of the benefits of cloud computing must encompass the short-, medium- and long-term views as well as termination costs. In addition, tangible and intangible benefits must be properly quantified and considered in the equation.

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