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8/3/2019 Cloud Computing Cost Benefits Evaluation_fhaq
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Fazale M. Haq
8/3/2019 Cloud Computing Cost Benefits Evaluation_fhaq
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Overall Objectivesy Faster Scalability
y Reduce upfront investment costs
y Save IT expensesy Improve reliability and availability of systems
y Increased mobility
y Focus on business
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Optionsy Software as a service
y The vendor delivers the application through the internetto customers who are signed up for the same application
y Utility computingy In this type of cloud computing businesses can sign up
with vendors that offer storage and virtual servers ondemand
y Web servicesy This type of cloud service allows developers in your
business to write applications that utilize APIs that areavailable as a web service
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Optionsy Platform as a service
y This type of cloud service allows a business to deliver
applications to their clients using the servers providedby the cloud service provider
y Managed service providers
y This type of cloud service provides an IT department
with services such as monitoring servers, checking for viruses in corporate emails, anit-spam and desktopmanagement
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Evaluation processy Identify security, compliance, licensing, monitoring
and data privacy requirements
y
Evaluate:y Hardware, bandwidth costs
y Utilization/ depreciation costs of assets
y Energy costs
y Building redundancy costs
y Security costs
y Payroll expenses and
y Indirect costs such as opportunities lost because the ITinfrastructure was not scalable soon enough
8/3/2019 Cloud Computing Cost Benefits Evaluation_fhaq
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Evaluation processy Compare costs with different vendors and use their
tools
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Evaluation processy Compare costs with different available options. For
e.g.,
Internal ITManaged
Services
The Cloud
Capital Investment $40,000 $0 $0
Setup Costs $10,000 $5,000 $1,000
Monthly Services $0 $4,000 $2,400
Monthly Labor $3,200 $0 $1,000
Cost Over 3 Years $149,000 $129,000 $106,000
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Evaluation processy Some costs benefit analysis methods:
y Net present value (NPV) is calculated as each cloud
scenarios discounted net benefits minus the cloudsdiscounted one-time investment costs
y Benefit-to-cost ratios (BCR) is calculated as each cloudscenarios discounted net benefits divided by itsdiscounted investment costs
y Discounted payback period (DPP) reflects the numberof years it takes for each scenarios accumulated annualbenefits to equal its total investment costs
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Evaluation processy Example: A company evaluation based on using a
public cloud VS in house cloud or hybrid model:
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Referencesy Cloud Computing: Key Considerations for Adoption. (n.d.). Infosys.
Retrieved June 3, 2010, from http://www.infosys.com/cloud-computing/white-papers/pages/index.aspx
y Knorr, E. (n.d.). What cloud computing really means. Businesstechnology, IT news, prod uct reviews and enterprise IT strategies -InfoWorld . Retrieved June 3, 2010, fromhttp://www.infoworld.com/print/34031
y Reese, G. (2009). C loud Application Architectures: Building Applications and Infrastr ucture in the C loud (Theory in Practice(O'Reilly)). Sebastopol: O'Reilly Media, Inc..
y The Economics of Cloud Computing. (n.d.). Booz Allen Hamilton: AStrategy and Technology C onsulting Firm. Retrieved June 3, 2010, fromhttp://www.boozallen.com/publications/article/42656904