MISA Cloud Computing SIGEvaluating ROI & TCO of Cloud Computing InitiativesPrepared by: Bill Baldasti | firstname.lastname@example.org | +1-416-524-8310April 11th, 2012 | Waterloo, ON
Agenda Types of Cloud Environments Optimal Workload Patterns for the Cloud ROI/TCO Measurements It’s not just the Financials Cloud vs. On-Prem Sample + Discussion
• Software as a Service (SaaS)Types of • Most MatureCloud • Examples: Salesforce.com, Dynamics CRM Online, SharePoint OnlineComputing • Platform as a Service (PaaS) • Service & Management Layer of the Cloud Platform • Example: Azure • Infrastructure as a Service (IaaS) • Foundational Layer of Cloud Computing, includes raw storage, compute, backup, disaster recovery, databases, security • Example: Amazon Web Services
Aside: Capex (or Capital Expenditure) is a business expense incurred to create future benefit i.e. acquisition of assets that will have a usefulAccounting life beyond the tax year. e.g. expenditure on assets like building,Tutorial hardware, or software. Operational Expenditures (Opex) deal with the required day-to-day functioning of the business, like wages, utilities. Opex is the money the business spends in order to turn inventory into throughput. Capex Opex Accounting Cannot be fully deducted in the Operating expenses are fully period when they were deducted in the accounting Treatment incurred. Tangible assets are period during which they were depreciated and intangible incurred. assets are amortized over time.
Capacity-UtilizationCurve • Cost savings to be realized by avoiding under provisioning and over provisioning
Measuring ROIacrossCategories Source: The OpenGroup – Building Return on Investment from Cloud Computing
Cloud ROICost SavingsModels Source: The OpenGroup – Building Return on Investment from Cloud Computing
Additional Value 1. Resource Availability – Free up critical resources for strategic workadds / ROI 2. Cloud can require less Professional Services – As cloud matures, it could lower costs required for SI, hardware and/or infrastructure services • Impact on SDLC – Budgeting for performance tuning can impact financials in addition to QoS
Costs to • The Obvious StuffConsider – Hardware – Networking Infrastructure & Bandwidth – Software Licensing Costs • Others to consider – Professional Services fees: Setup, Support, Integration – Power Costs – Hardware Warranty Costs – Financing Costs – Helpdesk Costs – Backups/AV/Patching/Updates – Time to Market Costs – etc.