If your business was not started in the cloud, migrating to it is a complicated dance with many moving parts. Each has its own associated risks and rewards. Calculating ROI when making these moves can be challenging and means measuring the cost, the benefits, and how they will evolve over time for both an on-premise solution and several cloud options.
While it’s not an easy calculation, figuring out cloud ROI is critical. It is a determining factor in making informed decisions about how IT delivers value and how you should invest in IT.
Here are several key factors to bear in mind when considering cloud ROI.
- Start by actually measuring ROI – Many business owners believe that migrating to the cloud is going to offer an inevitable ROI, so they simply take it on faith that the ROI is there. Do the exercise. Learn where the cloud makes business sense, how to realize the biggest benefits, and what the trade-offs are. This can be valuable when making an informed decision.
- ROI will vary depending on the delivery model employed – If you are migrating to a SaaS model (software as a service), for example, it may take much longer to realize ROI than the ROI of a more infrastructure-focused cloud service model.
- It’s not all about saving money – Much of your ROI will be realized in the form of efficiency and faster provisioning times, improvements in service, and the opportunity to explore new revenue streams.
- ROI for IaaS (Infrastructure as a Service) can vary tremendously – For example, if you’re running a high-performance application two days per month when you need to double capacity, payback could be significant. However, applications with steady daily use may have modest returns or even none at all.
ROI can change dynamically over time. Many companies have noticed increased organizational efficiencies and reduced costs after reaching a tipping point on the cloud. Being free of the work of purchasing, installing, maintaining, and upgrading hardware can pay off over months and years.
Migrating your infrastructure to the cloud creates significant opportunities to cut costs and increase productivity. However, the ROI you’ll enjoy is completely dependent on the workload, amount of time you’re willing to commit, and cloud model.
Got questions about migrating to the cloud? Give us a call and we’d be pleased to answer any questions you may have.
