Speed, cost and rate of change lead factors for cloud computing ROI

Friday, June 04, 2010

Recently, many companies have begun switching to cloud computing as an effective and efficient means for IT spending. With many companies having to tighten their budgets in the past because of the recession, return-on-investment has become even more important for companies. A recent CIO.com article detailed a way for companies to determine the ROI for cloud computing.

Cloud computing is valuable to IT departments because it allows companies to outsource IT infrastructure and redirect the money to other IT needs, while the company typically only pays the hosting cloud service for its employees' usage on the managed network. In addition, as the reports states "the rate of change, magnitude of cost reduction and specific technical performance impact that cloud computing can provide is not just incremental, but [it] can [increase] a five-to-ten times order of magnitude of improvement" for a company.

The CIO.com report states that, in order to determine ROI, companies should focus on the speed and rate of change for cloud services, the total cost of ownership optimization, the rapid provisioning a host company has for controlling performance speeds and the risk and compliance improvement that third-party firms offer. Other areas also include the increased margin and cost control of entering the cloud, as well as the enhanced capacity utilization and access to business skills and capability improvement it provides.

In general, it appears that many companies are reviewing these areas and seeing good ROI. A recent report from CloudTweaks found that 20 percent of all IT companies will begin using cloud computing within four years.