By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
SmartData Collective
  • Analytics
    AnalyticsShow More
    predictive analytics in dropshipping
    Predictive Analytics Helps New Dropshipping Businesses Thrive
    12 Min Read
    data-driven approach in healthcare
    The Importance of Data-Driven Approaches to Improving Healthcare in Rural Areas
    6 Min Read
    analytics for tax compliance
    Analytics Changes the Calculus of Business Tax Compliance
    8 Min Read
    big data analytics in gaming
    The Role of Big Data Analytics in Gaming
    10 Min Read
    analyst,women,looking,at,kpi,data,on,computer,screen
    Promising Benefits of Predictive Analytics in Asset Management
    11 Min Read
  • Big Data
  • BI
  • Exclusive
  • IT
  • Marketing
  • Software
Search
© 2008-23 SmartData Collective. All Rights Reserved.
Reading: ROI Still Elusive for Cloud Situations: Analyst
Share
Notification Show More
Latest News
ai digital marketing tools
Top Five AI-Driven Digital Marketing Tools in 2023
Artificial Intelligence
ai-generated content
Is AI-Generated Content a Net Positive for Businesses?
Artificial Intelligence
predictive analytics in dropshipping
Predictive Analytics Helps New Dropshipping Businesses Thrive
Predictive Analytics
cloud data security in 2023
Top Tools for Your Cloud Data Security Stack in 2023
Cloud Computing
become a data scientist
Boosting Your Chances for Landing a Job as a Data Scientist
Jobs
Aa
SmartData Collective
Aa
Search
  • About
  • Help
  • Privacy
Follow US
© 2008-23 SmartData Collective. All Rights Reserved.
SmartData Collective > IT > Cloud Computing > ROI Still Elusive for Cloud Situations: Analyst
Cloud ComputingUnstructured Data

ROI Still Elusive for Cloud Situations: Analyst

JoeMcKendrick
Last updated: 2012/06/15 at 2:59 PM
JoeMcKendrick
4 Min Read
SHARE

The concept of “return on investment” — at least in the way a financial type views it — is elusive when it comes to cloud computing.  It’s not that cloud may not be delivering tremendous value for a business, it’s just not measurable in traditional, by-the-book ROI ways.

The concept of “return on investment” — at least in the way a financial type views it — is elusive when it comes to cloud computing.  It’s not that cloud may not be delivering tremendous value for a business, it’s just not measurable in traditional, by-the-book ROI ways.

That’s the view of Gartner’s Daryl Plummer — who has been at the forefront of service-oriented thinking since the earliest days of SOA. He points out that “with cloud computing, stipulating that a hard-money ROI will be achieved, in the form of savings, is likely to net you more heartache than cost break.”

Indeed, many executives and managers are being disappointed with the lack of visible ROI seen with cloud engagements.  As Daryl put it:

More Read

cloud data security in 2023

Top Tools for Your Cloud Data Security Stack in 2023

Businesses Must Cope with the Benefits and Risks of Cloud Computing
Cloud-Centric Companies Discover Benefits & Pitfalls of Network Relocation
Optimizing Cost with DevOps on the Cloud
Cloud Technology Advances Make Telecommuting Highly Viable

“Countless CIOs and IT managers have yet to find fairly done and positive ROI for cloud computing. While some certainly have found savings, others lament the lack of write-offs for long term use of cloud services or the expense of large-scale deployments since $50 per user, per month, multiplied by 30,000 employees; adds up fast. Or how about the need to hire more people to manage service providers? No matter the reason, ROI doesn’t always come out looking so good for cloud projects…”

Daryl hits a central nerve here. ROI is a matter that has stymied many a company exploring service oriented architecture over the past decade. Going beyond the momentous case studies presented by vendors, in which XYZ Company saves $5 million by consolidating all its silos, there was often a flatlining after a couple of years, as the initial SOA savings cleared the books and enthusiasm for sharing services melted into the background.  Likewise, with cloud, there’s the huge, initial savings seen when a company or department goes to some type of  pay-per-use contract (either with IT or an outside provider). But what lies beyond?

With SOA, beyond the cost-saving phase with its solid, irrefutable ROI, there comes the second phase, the agility phase, in which the business runs faster and more flexibly, thanks to the ability to quickly map IT-based resources, on demand, to ever-changing business processes. Back-end support for seasonal promotions gets off the ground much faster. Mergers are effected with less confusion about overlapping customer lists and duplicated processes. Major systems upgrades occur incrementally, with less disruption for those at the front-end interfaces.  All good stuff, but how do you capture ROI numbers for these situations?

Likewise, while Daryl points out that even though cost-savings ROI for cloud may be questionable in many cases, the real business gains are made as cloud implementations mature — though formal ROI gets even more difficult to measure. “The value of using cloud computing can be found in soft measures just as much as hard ones,” he points out. “Empowering your users to serve themselves with cloud-based applications and services can even lead to more efficient processes because the users have more choice. Changing the relationship between your business users and your IT department should also not be ignored. If cloud computing can make your IT department more effective in helping users get what they need sooner, it may be worth spending a bit more to accomplish it. Now that’s value.”

(Photo by Joe McKendrick.)

JoeMcKendrick June 15, 2012
Share this Article
Facebook Twitter Pinterest LinkedIn
Share

Follow us on Facebook

Latest News

ai digital marketing tools
Top Five AI-Driven Digital Marketing Tools in 2023
Artificial Intelligence
ai-generated content
Is AI-Generated Content a Net Positive for Businesses?
Artificial Intelligence
predictive analytics in dropshipping
Predictive Analytics Helps New Dropshipping Businesses Thrive
Predictive Analytics
cloud data security in 2023
Top Tools for Your Cloud Data Security Stack in 2023
Cloud Computing

Stay Connected

1.2k Followers Like
33.7k Followers Follow
222 Followers Pin

Sign Up for Our Newsletter

Subscribe to our newsletter to get our newest articles instantly!

[mc4wp_form id=”1616″]

You Might also Like

cloud data security in 2023
Cloud Computing

Top Tools for Your Cloud Data Security Stack in 2023

7 Min Read
cloud computing benefits and risks
Cloud Computing

Businesses Must Cope with the Benefits and Risks of Cloud Computing

9 Min Read
cloud-centric companies using network relocation
Cloud Computing

Cloud-Centric Companies Discover Benefits & Pitfalls of Network Relocation

5 Min Read
DevOps on cloud
Development

Optimizing Cost with DevOps on the Cloud

7 Min Read

SmartData Collective is one of the largest & trusted community covering technical content about Big Data, BI, Cloud, Analytics, Artificial Intelligence, IoT & more.

ai in ecommerce
Artificial Intelligence for eCommerce: A Closer Look
Artificial Intelligence
AI chatbots
AI Chatbots Can Help Retailers Convert Live Broadcast Viewers into Sales!
Chatbots

Quick Link

  • About
  • Contact
  • Privacy
Follow US

© 2008-23 SmartData Collective. All Rights Reserved.

Removed from reading list

Undo
Go to mobile version
Welcome Back!

Sign in to your account

Lost your password?