{"id":21980,"date":"2016-04-20T14:29:22","date_gmt":"2016-04-20T14:29:22","guid":{"rendered":"http:\/\/www.businesscloudnews.com\/?p=250072"},"modified":"2016-04-20T14:29:22","modified_gmt":"2016-04-20T14:29:22","slug":"understanding-the-economics-of-the-cloud-its-more-than-just-a-money-saver","status":"publish","type":"post","link":"https:\/\/icloud.pe\/blog\/understanding-the-economics-of-the-cloud-its-more-than-just-a-money-saver\/","title":{"rendered":"Understanding the economics of the cloud \u2013 its more than just a money saver"},"content":{"rendered":"

\"Businessman<\/a>A recent survey<\/a> from Spiceworks highlighted 93% of enterprise organizations are now using at least one cloud based service within their operations, but there does seem to be a general feeling within the community that the benefits are not clearly understood.<\/p>\n

While most early adopters of such platforms, as well as other future tech, have focused on the performance capabilities which cloud can offer, the mainstream market believes the cloud is a cost reduction tool, a point which professional services giant Deloitte disagrees with.<\/p>\n

\u201cThe image of the cloud projected by the market is sometimes that all forms of cloud are cheaper, but it is a question of using the right tool for the right job,\u201d said Gwil Davies, Director & Cloud Lead in the EMEA IT Infrastructure at Deloitte. \u201cWhat decision makers at these organizations need to realize is that the cloud is not necessarily cheaper.\u201d<\/p>\n

\u201cI think it\u2019s more important for organizations get a real understanding of how to use the cloud and perhaps not automatically assume that moving all of their current IT into cloud is going to be the cheaper solution.\u201d<\/p>\n

The concept of the cloud being a cheaper alternative to traditional IT is sometimes a case of a lack of understanding of the technology itself, but also the journey on which organizations need to undertake to ensure cloud computing is being used in an effective manner. Selecting a cloud provider is only a small facet of the cloud itself, a fact which can be under-appreciated by enterprise decision makers.<\/p>\n

\u201cTechnology is a small part of the challenge, business transformation of the organization is key to the success of the cloud,\u201d said Davies. \u201cYou have to be really clear on the why, the what and the how. Specifically you have to have a keen eye on value. Some of the most successful cloud implementation projects generate value in new ways. These decision makers have specifically identified where clear business value can be generated. If the answer is to reduce costs, the cloud is not always the right option.\u201d<\/p>\n

Speaking at Cloud World Expo, Davies highlighted that a successful journey to the cloud is not one which focuses on reducing CAPEX and OPEX throughout the organization, but identifies where value can be achieved through a cloud-enabled business. Identifying where the value is, but also monitoring the progress of the project can be the difference between effective investment and throwing money away.<\/p>\n

\u201cThere are sometimes surprises \u2013 and most organisations will need to invest in some base capabilities, before a migration of systems into the cloud can begin,\u201d said Davies. \u201cThe business case needs to be defined around what the value of the transition is to the business \u2013 huge benefits can be realised, and often it\u2019s not just about reducing the current cost of your IT systems.\u201d<\/p>\n

One conclusion which can be drawn from the aforementioned survey as well as others, is the concept of cloud computing has penetrated into the mainstream market. But the question as to whether the benefits of scalability, compute power, agility, flexibility etc. have been effectively received is less clear.<\/p>\n

\u201cIt varies very widely (whether benefits beyond cost reduction are understood), as customers are in different stages of their cloud journey,\u201d said Davies. \u201cIn my opinion, the cloud as a technology is one of the most transformative opportunities available to enterprise organizations in recent years. The cloud is unlocking a huge amount of value throughout the organization, which wouldn\u2019t have been possible even two years ago. There is a huge potential to reach new customers, create new opportunities and experiences, as well as become more competitive in the market place.<\/p>\n

Different organizations are in different places though. The starting point for organizations, who are at the investigating the cloud, and haven\u2019t identified what the cloud means to the wider business, is mostly cost saving.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

While most early adopters of cloud have focused on the performance capabilities which cloud can offer, the mainstream market believes the cloud is a cost reduction tool, a point which professional services giant Deloitte disagrees with.<\/p>\n","protected":false},"author":203,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4121,505,1989,183,1297],"tags":[],"class_list":["post-21980","post","type-post","status-publish","format-standard","hentry","category-cost-reduction","category-deloitte","category-enterprise-it","category-hybrid-cloud","category-opinion"],"_links":{"self":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts\/21980","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/users\/203"}],"replies":[{"embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/comments?post=21980"}],"version-history":[{"count":2,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts\/21980\/revisions"}],"predecessor-version":[{"id":21985,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts\/21980\/revisions\/21985"}],"wp:attachment":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/media?parent=21980"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/categories?post=21980"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/tags?post=21980"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}