Cloud Computing is About Value Delivered, Not Cost Savings

Many organizations are looking to cloud computing to reduce their operational expenses. While lowering costs is often seen as one of the top drivers for cloud adoption, a recent Forrester Research study found that businesses now spend as much on new projects as they do on ongoing operations.

In the InfoWorld article, “The cloud won’t save you money -- and that’s OK,” writer David Linthicum unveils what he calls the industry’s dirty little secret about cloud computing -- cost savings isn’t the actual value of the cloud. Despite the promises of cost efficiencies, and the fact that it has long been promoted that cloud computing is a way to reduce IT spending, there has been a sharp rise in organizations purchasing premium cloud services and high-end consulting services.

Here is where David really hits the main point; the real benefit of building a cloud infrastructure comes from the actual value that’s delivered.

Looking at the cloud as only a way to reduce IT cost misses the full value of the opportunity. While there may be cost savings, the immediate ROI will be seen in the added agility gained by IT to respond to business needs.

IT needs to focus on delivering the capability to respond on-demand to new market opportunities and competitive threats. By helping build out this strategy and delivering business results first, IT can justify the ROI of their efforts while at the same time looking for operational efficiencies to reduce costs and overhead as they gain expertise in operating and managing cloud infrastructures.

Selling the cloud as a cost savings effort short changes the opportunity.

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