Four key reasons to include cloud computing in your business strategy

October 24, 2011

This guest post comes from Mark Skilton, Global Director of Strategy and Global Infrastructure Services, Capgemini, and Co-Chair of the Cloud Computing Work Group, The Open Group.

By Mark Skilton

The issue of success or failure in moving your company data, IT storage, servers or software to the cloud is often driven by technical issues, including performance, bandwidth, security and total-cost-of-ownership (TCO) considerations. While many of these factors are key criteria for selecting cloud solutions, they usually don’t align with the bigger picture that C-level executives must consider when adding new IT solutions.

How IT can help sustain or create a competitive advantage has never been more apparent than today through the use of cloud computing. This technology boasts benefits such as reduced costs and scalability, just to name a few, but many companies fail to find the right fit for cloud within their business. [Disclosure: The Open Group is a sponsor of BriefingsDirect podcasts.]

This is because cloud computing is not one size fits all. Performance, network bandwidth, security, and total cost concerns can be allayed through a better portfolio and investment approach that considers the multitude of options available.

How cloud computing fits

In industries where working capital bears a high price and is in short supply, businesses often have to make ends meet and have limited investment available. Therefore, being able to source the lowest cost and drive efficiencies even further is critical to growing business and market share.

For companies with limited working capital resource or cash flow funds, the use of on-demand services becomes an attractive option for consumers to avoid upfront costs or maintenance of services. Likewise, companies seeking to provide better profitability from their operation and vendors managing their cost center can leverage on-demand models to target areas of their portfolio to reduce cost and maximize return.

When adopting cloud computing, companies are often driven by cost effectiveness, rather than looking at the bigger picture and asking what cloud solution is the best fit for the business. Cost savings, longevity of product, and performance aren’t mutually exclusive, and all should be factored into the decision-making process when researching and purchasing a cloud solution.

Here are four questions, which include key metrics and drivers, to ask when researching cloud solutions that will maximize the value of cloud computing for your organization:

  1. Why is investment being spent on areas of IT that are not differentiating your business and can be commoditized?
    • Key Metric: The balance of percent of investment on non-core commodity IT
    • Key drivers: TCO needs to consider where to focus IT investment
  2. How can IT grow and adapt with the ever-increasing expansion of data storageand the growth of computing demands eclipsing on-premise facilities?
    • Key Metric: The cost of storage and archiving , recovery and continuity
    • Key drivers: Latency of network and storage costs can be targeted through considering the whole IT portfolio, not just niche use cases of cost-performance. Look at the bigger picture.
  3. How can access to new markets and new channels be better served through extending networks and partnerships?
    • Key Metric: Size of markets and effectiveness of sales channels, both internal sales and external direct sales and reselling
    • Key drivers: Total cost of acquisition can include the creation or use of third-party distributed marketplaces and self-service portals and platforms
  4. Is your own IT fast enough to beat your competition or drive the cost savings or revenue and margin growth plans you need?
    • Key metric: Speed of IT delivery and its cost and quality of service.
    • Key drivers: Performance can be offered through selected service provisioning. Question whether all knowledge needs to be in-house. Skills can be as-a-service too.

Open Group Cloud Computing Book

he Open Group recently published Cloud Computing for Business –The Open Group Guide to address many of these key questions. The book is intended for senior business executives and practicing architects responsible for defining corporate strategy, and it identifies how to select and buy cloud computing services to achieve the best business and technical outcomes.

You can purchase a copy of the book from The Open Group here or download preview sections here:

Cloud Computing for Business – Preview – first 30 pages
Cloud Computing for Business – Section 1.8
Cloud Computing for Business – Section 4.1

This guest post comes from Mark Skilton, Global Director of Strategy and Global Infrastructure Services, Capgemini, and Co-Chair of the Cloud Computing Work Group, The Open Group.

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