[ Cloud Computing ] Re: Cloud Computing ROI model

In a DC you also need to include your networking equipment, software and labor costs. Tape/DVD backup, Disaster Recovery, Real Estate Taxes, building maintenance, insurance, etc. If you come across the argument that starts with "A quad core server costs XYZ $..." walk away.

Ray

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From: David Shefter <dshefter@gmail.com>
To: cloud-computing@googlegroups.com
Sent: Wednesday, December 24, 2008 7:59:16 AM
Subject: [ Cloud Computing ] Re: Cloud Computing ROI model

I do however think that in order to come up with a tangible ROI model for this, you would need to know all aspects of the operating costs.  These include labor, software, hardware, power, network, etc.

Since in an enterprise case, there needs to be redundancy in data centers there is very little likelihood of a straight ROI model - It seems to apply much better if it is crafted on a software or hardware or services move to a cloud.

Thoughts ?

DS

On Wed, Dec 24, 2008 at 2:41 AM, Geva Perry <gevaperry@gmail.com> wrote:

Thanks, Sankar. All your points above are valid, but not relevant to
what I'm looking for. I was hoping that someone had worked on a
calculation they can share that analyzes the cost benefits from
switching to a public cloud from an on-premise data center or a
dedicated hosting environment.

You are raising some of the challenges in migrating to a cloud, which
should of course be taken into account in the little exercise I am
trying to work on, particularly if they add to the costs of moving to
a cloud (management, monitoring, security, etc.) and thus reduce the
ROI of such a move.

On Dec 23, 7:54 pm, Sankar Nagarajan <nagarajansan...@gmail.com>
wrote:
> Geva,
>
> All your points holds good.
>
> However, for a knowledgeable customer, there are more selling points
> or differentiators (in terms of your services) needed
>
> * Reliability is seen as an issue on the cloud - How does one address
> this?
>
> * Protection/Security is seen as a major issue on the cloud :- How
> does one address this?
>
> * Cloud deployment for moderate to complex applications is not easy -
> (Custom App-stack/Machine Images) - How does one address this?
>
> * Monitoring ,Management and maintenance of deployed apps are not so
> easy for every app- How is this addressed?
>
> * There are various clouds / cost models , If one can make a
> comparison, consult and be able to help a client to find the best
> choice for their budget and service them
>    this would be add punch to the Value -Proposition?
>
> In essence, it is granted that clouds come with their inherent
> benefits and value , However to sell this model effectively with an
> ROI model, from a solution provider or SaaS viewpoint, a number of
> points (i have mentioned a few) have to be considered and factored in
> the value proposition to a end user,dependening on one's capabilities.
>
> Sankar Nagarajanhttp://www.linkedin.com/in/nsk007
>
> On Dec 24, 12:54 am, Geva Perry <gevape...@gmail.com> wrote:
>
> > Hello all,
>
> > Has anyone developed an ROI model for cloud computing (specifically,
> > public Infrastructure-as-a-Service a-la AWS)?
>
> > I'm trying to demonstrate to a few companies both the hard and "soft"
> > cost-savings of migrating to a public cloud environment. I'm
> > attempting to encompass as many aspects as possible. Including:
>
> >  -- Costs savings for servers, storage, networking, software licenses,
> > power & cooling, real estate, system administration labor -- mainly
> > focusing on the possibility to eliminate over-provisioning and scale
> > on-demand with a pay-per-use pricing model
> > -- Costs savings due to decreased provisioning time
> > -- Shortening of application lifecycle and decreased time-to-market of
> > new products and services
> > -- Increased reliability (DR, etc.) at lower costs
> > -- Increased performance
>
> > Of course, the model also needs to take into account various
> > "switching costs".
>
> > If anyone has any concrete thoughts on the matter, or perhaps just
> > links to quantitative case studies, it would be greatly appreciated.
>
> > Geva Perryhttp://gevaperry.typepad.com

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