Focus on Flexibility, Not Cost Savings                              Focus Research ©2012   All Rights Reserved
Focus on Flexibility, Not Cost SavingsListening to multiple presentations from a variety of vendors with cloud-based solut...
By reducing both the upfront costs and the deployment time, organizations gain a tremendous advantagein rolling out new so...
competitive advantage over their competitors that are scrambling to identify and mitigate these risks ontheir own.Saving m...
Upcoming SlideShare
Loading in...5
×

Focus on Flexibility Not Cost Savings

227

Published on

Published in: Technology, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
227
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
5
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Focus on Flexibility Not Cost Savings

  1. 1. Focus on Flexibility, Not Cost Savings Focus Research ©2012 All Rights Reserved
  2. 2. Focus on Flexibility, Not Cost SavingsListening to multiple presentations from a variety of vendors with cloud-based solutions, you would get theimpression that the greatest benefit of the cloud is cost savings. That’s certainly the way most marketingpitches for the cloud seem to lean.While it is true that entry costs for a subscription-based service will almost always be lower than the entrycosts for a service or product that is purchased outright, the math begins to favor the capital expenditureafter the 5 or 6 year mark. This situation is quite similar to the cost differential between purchasing ahome or automobile outright vs the long-term costs of financing these same items over a longer period oftime. Ultimately, you pay for convenience, and the cloud offers a special brand of convenience. The key isfor an organization to determine if the benefits which are derived from this convenience, outweigh the rawcosts that might be greater over the long haul.It is no wonder that very few vendors will ever suggest that the long-term costs of any particular cloudcomputing service are automatically lower than the alternatives. No, what the cloud provides is low entrycosts plus increased business and technology flexibility.Deployment FlexibilityTypically, when an organization is planning to implement a large solution suite such as CustomerRelationship Management (CRM) or Enterprise Resource Planning (ERP), it is necessary to procure andprovision all the necessary hardware to support the full implementation well in advance. Thus, even if theproposed CRM or ERP system will eventually be deployed across 4 departments over a 9 month period,the initial hardware that is purchased and installed, must be able to support the complete user community.In order to obtain the best prices, the software licenses are often obtained upfront as well. While thisobviously front loads the organization’s costs, it also extends the project implementation time for thoseinitial users. More importantly, once such an expenditure of time and money has been made, there’s nobacking away from this type of project – even when the presumed benefits fail to materialize.The required level of commitment for this type of purchase generates a correspondingly complex anddrawn out approval process, which then impairs an organization’s ability to respond to industry pressuresand business changes.Focus on Flexibility, Not Cost Savings Focus Research ©2012 2
  3. 3. By reducing both the upfront costs and the deployment time, organizations gain a tremendous advantagein rolling out new solutions, and testing new approaches, while minimizing their overall risk and the scope/cost of the change. To use the earlier example, our hypothetical organization can more readily implementthe new cloud-based CRM solution for the first department on the list, which allows them to start realizinga return on their investment earlier than with the on-premise solution. Then, should it turn out that thereis only a business benefit from having 2 (not 4) departments on the solution for the first year, they have agreat deal of flexibility in changing direction to accommodate this new reality.Integration FlexibilityBuying into a cloud-based application or environment is more than just paying monthly, quarterly orannually for a service. In many cases, organizations are not just purchasing a product, but buying into anecosystem – one that has the potential to integrate with other applications, platforms and environmentsthat the organization might be interested in.This integration potential is more viable at the cloud level due to the larger economies of scale availableto cloud vendors. The benefit to cloud customers is that they can more quickly gain access to newapplication programming interfaces (APIs) or new application features or new plug-ins to the applicationenvironment that give them new features and capabilities. And this can typically be done without amassive upgrade of the platform in question. The cloud holds the potential to remove the complexityof upgrades from the business consumer, resulting in faster, less painful access to new features ascompared to what is possible in an on-premise configuration. Faster access translates to earlier businessimplementation and improved business agility.Security FlexibilitySecurity is often cited as a primary concern against cloud computing, but a recent CIO.com surveyshows that a large percentage of IT professionals consider it safe to use in some capacity. Additionally,looking at the list of the largest breaches for 2012, very few of these victims could be said to be cloudproviders. While cloud vendors are going to face more attacks because there is a greater store of treasureto be had, they also have more incentive and impetus to implement effective security measures for theirenvironments.Organizations which can take advantage of this level of expertise to provide or implement more secureservices and applications will win by doing so. But putting themselves in a better position relative to thesecurity of the applications they use – especially for holding customer data – they will be able to gainFocus on Flexibility, Not Cost Savings Focus Research ©2012 3
  4. 4. competitive advantage over their competitors that are scrambling to identify and mitigate these risks ontheir own.Saving money is a good thing, whenever it can be done wisely, but it can be just as important to spendmoney more effectively, and the cloud provides organizations with a number of ways to invest more wisely,deploy more quickly, integrate more effectively, and secure more thorough – all of which add up to greaterbusiness agility.An improved top line can be very great for the bottom line. Andrew S. Baker is a hands-on architect of advanced technology solutions that increase corporate agility, mitigate business risk, reduce operating costs, and facilitate business growth for organizations in the SMB market. Mr. Baker has served for over 15 years as a trusted technology advisor to small and mid-sized organizations across many verticals, specializing in the areas of technology infrastructure, information security and cloud computing.Focus on Flexibility, Not Cost Savings Focus Research ©2012 4

×