The cloud infrastructure market is cumulus and expected to cross $51.7 billion in 2019, driven by the need for cost-effective and scalable IT solutions. Talking about the cloud effect on businesses, Natalya Yezhkova, IDC Research Director of Storage Systems says, “The breadth and width of cloud offerings only continue to grow, with an expanding universe of business- and consumer-oriented solutions being born in the cloud and served better by the cloud. This growing demand from the end-user side and expansion of cloud-based offerings from service providers will continue to fuel growth in spending on the underlying IT infrastructure in the foreseeable future.”
The cloud infrastructure boom is a natural transition for organizations whose IT costs were weighing them down. Scaling up or down meant more costs. Mandatory software upgrades were also needed and the overall IT infrastructure management required resources to manage it, but with no scientific method to limit costs.
Cloud infrastructure has changed this scenario and is providing companies of all sizes and across all industry segments the opportunity to maximize their IT infrastructure. However, having said that, when it comes to measuring Return on Investment (ROI) on cloud infrastructure some questions crop up. If one were to choose cloud computing – in-house or public cloud, how would one assign an ROI to it? What features of cloud infrastructure affect ROI?
ROI is the proportionate increase in the value of an investment over a determined period. Investments when moving to the public cloud are less, but calculated over a period, can be more. With a private cloud, the initial investment is more, but over time, this cost is factored out. This kind of measurement is purely technical and misses the broader impact of the cloud on a business. Overall, for any company, revenue numbers matter, but so do customer value, brand value, and the value of competitive advantage which cannot be ignored. Therefore, when calculating ROI on the cloud, one must focus on productivity, speed, size, and quality.
Keeping these factors in mind, here are some tangible ROIs from cloud computing:
- Cloud computing as an abstract virtual hosting solution offers a real-time environment. It has taken away the need to invest in physical servers and upheld the pay-per-use model. It provides businesses with the resilience required for workplace productivity. It enables resource sharing and thus helps to improve utilization. This sharing feature is not restricted to enterprises; it can be between an enterprise and a public cloud or an enterprise with a private cloud. Its flexibility combined with the power of savings in the immediate future makes cloud infrastructure an attractive alternative to traditional IT infrastructure.
- Cloud infrastructure empowers clients to access virtualized hardware on their own IT platforms. This offers numerous features and benefits such as scalability, limited or no hardware costs, location independence, security, and so forth.
- Cloud infrastructure assures businesses tremendous performance whether they scale 10 percent or 100 percent. Not having to worry about additional infrastructure investment costs helps companies to plan their IT budgets better. There is also the fact that capacity wastage is brought down to nil.
- There is no lockdown in infrastructure. A seamless performance wherever an organization’s businesses are located, performance remains the same. The pay-as-you-go model frees up investment costs bringing down IT expenditure considerably.
- The capacity utilization curve is a familiar concept for all. The model illustrates capacity versus utilization. It helps organizations to maximize their IT spend and helps to provision more or less as deemed fit. It is fitted around the central idea of utility requirements provisioned by on-demand services to meet actual needs.
To summarize, the ROI on cloud infrastructure requires intuitive planning right from the plan to the execution stage. More importantly, to maximize savings on the cloud requires intuitive planning. Trigent’s Managed Cloud Infrastructure Services helps enterprises to control their cloud journey.
We help enterprises to choose the right cloud platform to move on-premise infrastructure and help run business applications. We help enterprises to identify the business areas and workloads that can be migrated to a cloud computing model to reduce costs and improve service delivery in line with business priorities.