In order to operate your business effectively, your computer system is completely reliant upon a decent server.
For example, if you wanted highly rated Costco server model, it would run you $1700.00 before you paid someone to set it up, manage it, etc. Because of the improved efficiency allowed by the cloud (coupled with additional security and monitoring) it turns out the cloud will actually save you in computer costs.
In terms of the Cloud being cost effective, it may turn out that it’s what you won’t need with your cloud solution that will ultimately prove most significant with respect to your financials. Hosting with a Cloud provider may not preclude you from ever needing an IT person on-premise, but chances are, you will have more than enough coverage with “one” as opposed to “a whole team” – and you may even find it would be enough to have a good IT consultant on speed-dial for emergencies.
At the very least, you will see improved productivity, higher revenue, and greater opportunity to focus on the task at hand. This entry was posted in Blog, Business Tips, Cloud Computing, Reducing Your Costs, Running Your Business, Technology by admin. Get the capital needed to help grow your business, advertise, build inventory or pay expenses. Customized insurance solutions for small to medium-sized businesses, including personal coverage.
The Small Business Authority brand has been established to provide real-time state-of-the-art content and business services in order to become the definitive destination for small business owners across the United States. Newtek aims to provide real-time, state-of-the-art content and business services in order to become the definitive destination for business owners across the United States. Your Tech Support staff has always gone above and beyond to address hosting issues and solve problems.
Great and reliable service with friendly and technical support keeps me coming back and recommending you guys again and again. I have had excellent customer service with Newtek for over 7 years and although my web developer wanted to host my new site I was loathe to leave your company.
More than twice as many small businesses are using cloud solutions now in comparison to the second half of 2010, and the numbers continue to increase.
Many businesses have addressed emerging trends through actions to drive cost reduction and leverage IT service providersa€™ adoption of cloud-style services. Return on Investment (ROI)A is perhaps the most widely used measure of financial success in business. Just looking at cloud computing from a technical infrastructure point of view is potentially missing the wider picture of the impact of technology on the business. The effect is equally clear in the capacity-utilization chart for Konsort-Prinza€™s first year of use of its new cloud-based system, shown earlier. Cloud computing enables resources to be shared by different loads, and thus improves utilization. At the infrastructure level, resource sharing means supporting many platforms and applications on the same physical resources, using the virtualization techniques described under IaaS in the section on Service Models.
At the platform and application levels, providers can achieve resource sharing through multi-tenancy. Usage-based pricing translates the higher utilization achieved by providers into lower costs for consumers.
The benefit to Konsort-Prinz is not that they are using less resource, it is that they are paying for less resource. These gaps are being addressed by the pay-as-you-goA principle of on-demand cloud computing, which is changing the software cost model. In addition to the advantages of load sharing, cloud computing can result in lower IT costs because of skill specialization and economies of scale. The second major way in which cloud computing contributes to ROI is through improved speed of operation. Cloud computing provides an increase in provisioning speed, which enables enterprises to acquire the resources they need faster. Elastic provisioning creates a new way for enterprises to scale their IT to enable business to expand. Organizations can review and develop business plans and then deploy infrastructure and services in a more rapid and proactive way.
This higher rate of cost reduction means that profitability increases more quickly, giving shorter pay-back times and increased ROI. As well as accelerating business process execution, cloud computing speeds up the process of IT asset management.
Technology design choices and purchasing are often done by strategic or tactical contractual purchasing based on project requirements, with little consideration for optimizing running and maintenance over the whole system lifecycle, but the cost of maintenance and modifications often represent a significant part of the asset lifecycle beyond initial provisioning. The ability to a€?design and provision for runa€?, so that the choices of IT procurement are aligned with the best options and performance for long-term operation, has long been an ideal goal of business and IT. A key aspect of moving to cloud computing is the ability to select hardware, software, and services from defined design configurations to run in production. The combination of lower cost and faster delivery makes products and services more competitive, which generates more business and leads to a larger scale of operation. Cloud computing removes the need for additional infrastructure to test and enter markets (a key advantage particularly for small to medium-sized organizations).
Internet services such as Facebook, MySpace, Flickr, YouTube, and Twitter have become part of our everyday social interaction, and businesses are increasingly making use of IT-based collaboration services for communication, information exchange, and virtual meetings.
From a providera€™s point of view, these are prime examples of simple, high-value services that are massively successful. At the other end of the scope and complexity scale, there are many cases of companies large and small that can enter and develop service offerings through a long tail approach enabled by cloud computing. The ability to become a cloud provider is one way in which new business opportunities arise.
Within particular cloud-based business ecosystemsA there will be many opportunities for specialist service providers. The positioning of cloud computing, while initially seen as a disruptive technology influence on both buyers and seller prospects, is now evolving into a trade-off between low-cost arbitrage and added value QoS. In a market driven by cost, there can be intense competition between participants to make cost savings. The counter-balance to this is the quality of service which, taken in comparison to the cost of that service, characterizes the value delivered. The differentiator of cloud computing is not just the utility computingA services, but includes all the higher-level services that enhance and build service value. To make the trade-offs between the factors involved, you need a model of how your project will achieve ROI.
This section illustrates the process, by showing how our three example companies assess the ROI of their cloud solutions.
ROI is generally defined as the ratio of money gained or lost on an investment to the amount of money invested.
When an investor puts money into a venture in expectation of a return, the calculation of the ROI is straightforward. When the term ROI is used in a corporate environment, as with our first two example companies, the situation is more complicated.
For Konsort Prinz and Sam Pan, we will take the financial improvement to be how much profit or saving is realized over the first three years of the project, and take the cost to be the amount of money required to make the change that enables the profit or saving. The current systems at Konsort-Prinz are not coping with the existing workload, and are limiting the company's ability to do business. Their cloud service costs are taken from the workload and cost models that they developed as described in Buying Cloud Services. The calculation shows that the cloud solution will give an ROI over three years of 124% a€“ a very significant improvement over the data center upgrade. Sam Pan Engineering has a comparison between continuing the status quo and moving to cloud services.
The calculations show payback of the investment less than five months into the second year, with ROI over three years of 400%.
ViWi is the only one of our three example companies to which the term a€?return on investmenta€? applies in the literal sense.
ViWia€™s founder is asking for $400K which he believes will enable him to establish the company.
ViWia€™s founder does some calculations, produces a nice graph showing revenue and costs, and says that the company will be in profit within a year, and over two years will have an accumulated surplus of revenue less cost of nearly $5M. Under cross-examination, he explains that this is based on an underlying assumption of 50% per month compound growth in virtual widget use. The interesting point from the cloud computing perspective is that the risk is in the normal business factors, not in the use of cloud computing. Clearly the normal financial models showing revenue, capital and operational expenditure, and costs are the main models from which ROI is calculated. Utilization is a key factor that affects productivity, as explained under Productivity: More Business with Less IT. At the infrastructure level, the instance to asset ratio shows the number of guest operating system instances to physical resource assets. The tenancy to instance ratio measures the number of tenants per resource a€“ see Resource Pooling. CPU utilizationand memory utilization are important to providers and to IaaS and PaaS consumers. Consumers should of course monitor cost, and should look at it in conjunction with workload. Private cloud users often look at the server consolidation ratio a€“ the ratio of servers in their private cloud to those that were used before the cloud was introduced. Speed of provisioning contributes to speed of cost reduction, which can provide a long-term indicator of success.
Cloud providers a€“ including providers of private cloud a€“ will also monitor their investment in IT resources. You may be able to measure market disruption rate as a combination of rate of revenue growth and rate of new market acquisition. A measure of the complexity of your ecosystem interactions is ecosystem optionality a€“ the number of external assets, APIs, and services that you have to deal with. Basic QoS can be measured in terms of availability, reliability, recoverability, responsiveness, and throughput. Revenue efficiencies, measured as a combination of margin increase per unit revenue and rate of increase of a€?annuitya€? income, can also help you to determine whether you are succeeding in your attempt to respond to competitive pressure by raising quality. To illustrate the principles of monitoring cloud ROI, leta€™s look at how each of our example companies takes stock of its ROI position part-way into its project.
These are compared with the values of the in-house system, which is the benchmark for a€?averagea€?.
In the third week of November of the first year of operation of the new system, there is a crisis executive meeting.
The ROI scorecard shows that their quality level is unsatisfactory, but the other measures are healthy. By taking advantage of cloud scalability, the company has been able to fine-tune its operation and avoid crisis measures. Six months into the project, there is no crisis, but the ROI scorecard does give the project team some cause for concern. Utilization is about as expected, in fact slightly better, with a server consolidation ratio of 8:1. Assuming that the investment required will be only half of what was planned, there is no change to the percentage ROI over three years, but the financial improvement is only half of what corporate management was expecting. The good news is that they have been able to launch after three months, rather than five months as anticipated. Public and private cloud use has gained steam in the enterprise, shows survey data, despite IT pros' nagging concerns.


Few technologies have affected the IT industry as profoundly as cloud computing, which delivers computing as a service or utility. The cloud also eases much of the technological burden involved with IT systems support and maintenance, helping companies focus on the productive business use of their workloads rather than on underlying systems and software. This report examines key findings of a recent TechTarget survey about cloud adoption and services.
In the third quarter of 2012, approximately 1,500 IT professionals responded to a TechTarget survey examining the use of cloud computing and cloud services in the enterprise. Approximately 61% of respondents reported they use some form of cloud services, while 39% said they do not use cloud services within the enterprise.
Small companies, for example, typically have more modest, in-house IT resources, which make it easier for them to look to less traditional IT methods such as cloud computing. Cloud computing can be divided into three general models: public cloud, private cloud and hybrid cloud. The use of each cloud model among respondents is fairly evenly split, with 40% using public cloud, 30% using private cloud and another 30% of respondents reporting the use of hybrid cloud services. While there are numerous benefits to public cloud, 60% of respondents using this cloud model cite improved availability for computing workloads as the biggest benefit. Of respondents that implemented a private cloud, 59% note a more efficient use of IT resources, while 53% benefit from workload scalability.
With a hybrid cloud in place, 59% of users report more efficient use of IT resources, while 58% cite the benefit of workload scalability. Hybrid cloud users also echo the concerns of private cloud users, with 61% of respondents suggesting problems with application suitability and 39% noting a lack of interoperability or integration between private and public clouds.
As cloud services infiltrate the modern enterprise, it's important to keep all three principal cloud models in the proper perspective.
Before the virtual storage area network, there were Fibre Channel storage area networks and iSCSI. If you think you know which features only come with the vSphere Distributed Switch, challenge your knowledge with this quiz.
Leave on good terms from your system administrator job to avoid burning bridges and to keep a good reputation in the industry. Of the nine security bulletins released for August Patch Tuesday, Windows Server operating systems are only affected by six. Cloud computing is commonly known as the sharing of resources, such as applications or services, via a decentralized network (typically the internet) known as a cloud.
The main types of scenario we find ourselves in is fully Cloud (using Office 365 and other services), or hybrid cloud where some services, such as file and print, is held internally on a server and others, email for example, are provided by a hosted Exchange provider. For the smaller business fully cloud based can make great sense as it removes the need for any complex technology on site, reduced hardware and software costs and lower overall system maintenance. For larger businesses the case can be less persuasive for full cloud as your internet connection will be under a lot of pressure, and the cost of bigger connections can get quite serious, so hybrid tends to make more sense. Cloud computing is here to stay and like Microsoft Office may ultimately be the only way to get the technology services we need. This entry was posted in News & Views, Productivity, The Interwebs and tagged Apps, Cloud, Internet, Productivity, Servers by Eric Srikandan. Listen, IT is complicated – and talented IT professionals are expensive to keep in-house. Saving on salaried employees by leveraging cloud services has been a winner, and continues to be, for millions who sign checks for small businesses. Newtek, have been a customer for almost 10 years, really does an awesome job and always a pleasure to deal with. It’s not everyday someone can feel good about their experience and be a satisfied customer.
Please download the latest version of the Google Chrome, Mozilla Firefox, Apple Safari, or Windows Internet Explorer browser. Many industry organizations and leading IT suppliers of software, hardware, and services, seeking to address their customer needs, have vigorously evaluated and followed a cloud-style strategy.
If you have a proposal to use cloud computing in place of in-house IT, this is how you and others will want to assess it. It can be measured in a variety of different ways, but there are just four basic ways to improve it: decrease the investment, increase revenue, decrease costs, and make the return faster. There are a number of fundamental drivers that impact on investment, revenue, cost, and timing that can be positively influenced by using cloud services. The figure below uses a similar curve to illustrate the central idea of utility-based services enabled through on-demand provisioning to meet actual usage. For most of the year, the in-house system would have been used at a small fraction of its capacity, but in the peak month it would not have had sufficient capacity, and business would have been lost. Also, in many enterprises, servers are dedicated to specific functions or departments, and can be massively under-utilized. The sharing can be between enterprises, with public or community cloud, or within an enterprise, with private cloud.
Their cost curve follows their resource utilization, resulting in a lower total than for a dedicated, under-used system. Traditional licensing associated with ownership, number of users, support, and maintenance costs and services leads to capacity-utilization gaps similar to those for hardware resources. A large cloud provider a€“ or private cloud division within a corporation a€“ can be much better at providing IT services than a small IT department.
And, because resource configurations are visible, it speeds up the choice of multi-sourced resources, which can dramatically cut the time to deployment of new products and services. The compression of provisioning time from weeks to hours, for example, demonstrated by cloud computing providers is a means to rapid execution that is not just about saving time, but is also defining a new business operating model. Customization and development, testing, and support can also be seen in a new light with the provision of IT services in a dynamic fashion targeted at business needs. Typically, cost is reduced over the lifetime of a product or service as the depreciation cost of purchased assets decreases and as efficiencies are introduced.
The investment in data, knowledge, and infrastructure assets and software now represent lifeblood operations for many businesses. But, while technical trends such as object-orientation, SOA, and Web 2.0A have brought functional improvements, the improvements in runtime infrastructure support have always been elusive.
It can help an enterprise achieve the goal of a more cost-effective asseta€“management lifecycle process for the IT portfolio, to optimize both design and run-time performance. But what makes cloud computing really exciting is that its potential effect on business is not just incremental improvement but disruptive transformation, which it enables through new operating models.
It enables businesses to pursue new and existing markets by rapid entry and exit of the products and services. For any product, most people will be satisfied by a small set of standard features, but there is a a€?long taila€? of potential users that require customization.
Sam Pan Engineering has it in mind that, if its private cloud is a success internally, then it will offer spare capacity to other companies, as public IaaS.
These may include opportunities to provide services that are people-based as well as IT-based, as BPaaS.
Your competitors will adopt it too, bringing pressure to cut price and reduce your precious margin. This is often seen in a negative context, as the lower costs and margins are seen as a detriment to the participants overall.
Adopting the cloud computing paradigm drives costs down through greater efficiencies of working capital. This is part of a movement from IT-centric to business-centric services across a wider services continuum, with utility services for infrastructure at one end, and with business-centric software and business processes delivered as a service from the cloud at the other. This model will typically include assets, revenue, workload, costs, time to deliver, features, quality, and scale. The illustrations use simplified spreadsheet models, which are available for download from The Open Group website [EXAMPLES].
In principle, ROI can still be calculated as the gain from the investment divided by the cost of the investment, where the gain is the financial improvement resulting from the investment less the cost of the investment, but it is not always easy to determine what the improvement is or what the cost is, particularly when the investment results in an annual profit or saving for the foreseeable future rather than a one-off benefit. The company executives estimate that their turnover and profits would grow by 10% per year if their IT systems were able to handle the increased demand. They take their IT costs of $1.35M for the last financial year as the assumed annual cost of this solution going forward. The company will need to de-commission its data center, including making severance payments to those IT staff that cannot be re-deployed. They have not yet chosen their supplier, but use an annual figure of $550K which seems representative of the three that they have considered. Its corporate executive is considering a proposal to invest $5M in converting about 10% of its servers to private cloud. The proposal is to keep 40% of the servers, reducing non-cloud IT costs to $10M, and to convert 10% of them to cloud servers, which will then cost $2.5M per year to run. The company has backers who are investing capital, and want to know what return they will get.
The backers must use their business judgement as to the likely take-up of the product, and to assess the risk involved. If the value of the company after two years is $3M (which would be roughly the amount of cash generated, after tax, under the foundera€™s projection), and their share is therefore $1.5M, the ROI over two years would be 375%, as shown below. The ROI figures are affected very little by changes in the assumptions made in the cloud workload and cost models, because the costs are directly related to the workload, and hence to the revenue. For cloud projects, you should also look at indicators of health of the four ROI drivers described earlier in this chapter: utilization, time compression, scale, and quality.
Consumers, PaaS providers, and SaaS providers should look at them in conjunction with workload. If payment is directly related to resource use a€“ a€?pay-by-the-drinka€? a€“ then costs should track workload. ViWi plan to keep close track of whether their customers continue to use the virtual widgets over a long period, or whether they forget about them after the first few days of interest.
To keep things simple, the examples just show indicators for utilization, speed, scale, and quality, mostly with a single indicator for each.
Konsort-Prinz expects an improvement in utilization, and also in scale due to the ability to provision cloud resource, but no significant change in the other figures. The operations manager says that the system is no good, they are not coping, they will not be able to handle the Christmas rush of orders, there is nothing they can do about it now, but they must scrap the cloud project and invest in a new and bigger in-house system for next year. Because the other indicators are good, the project leaders are able to make the case for exerting more pressure on constituent companies to adopt the new system.
The assumptions about time-to-market, partly based on experience with traditional developments, has proved pessimistic. But the rapid progress has given confidence and, more importantly, has given some time to show the value of the product. More than that, they will invest extra money in advertising, to try to increase that growth rate. Part of cloud's appeal is clearly financial; it allows organizations to shed at least some of their expensive IT infrastructure and shift computing costs to more manageable operational expenses. Regardless of the motivation, business owners and data center managers are increasingly turning to cloud for vital computing services. The proliferation of cloud offerings -- SaaS, Iaas, PaaS -- that give IT professionals an array of options could be behind an increased interest. Small and large companies are implementing cloud services more readily than midsize companies (Slide 1), primarily due to differing business needs. Larger companies primarily approach cloud services as a cost-saving strategy for offloading non-mission-critical workloads or those exempt from compliance requirements.
Public cloud consists of independent, third-party service providers that rent or lease cloud computing resources to external clients, such as businesses or government agencies.


And all three cloud models will see increased use over the next six months, as survey results show in Slides 2a and 2b. Of survey respondents using public cloud, 73% point to cost savings as the primary motivating factor. About 57% list workload scalability, which allows users to adjust IT resources to accommodate changes in computing demands, as the main perk for public cloud. Approximately 57% choose private cloud because it automates IT tasks, and 53% say a private cloud model meets their business' computing needs.
However, 62% of respondents using private cloud note that some applications can be problematic when they're run in the cloud. Of respondents using hybrid cloud, 63% expect cost savings to be the biggest advantage; 56% expect the hybrid cloud model will best fit the business' computing needs. As with private cloud computing, the emphasis is on maximizing business agility and ensuring that computing resources are efficiently allocated and optimized. These concerns may pose serious issues when moving workloads among cloud providers or using local applications and data with cloud-based workloads.
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It can mean any number of things, but we’ll look at what it means to us and how it can be applied to your business. Everything you do is web based and the processing power and actual workings are taking place somewhere in the ether (cloud).
These include Hosted Exchange, Cloud Backup, Office 365, VoIP and a number of web based systems. Which one is for you depends on a number of factors, but typically the distribution and number of users, volume of data and what line of business applications you run.
Microsoft have stopped their Small Business Server suite of products (which included file, printing and email) so to replace this a mix of hosted email and local file and print makes sense as the licensing cost of the software for everything in-house can be quite substantial. Newtek Business Services has been in business for over thirteen years, servicing over 100,000 business accounts in all 50 states. The challenges and issues are in the transition from the current traditional IT to the new potential capabilities of cloud computing. Using cloud computing, you can achieve any of these; but you cannot achieve them all at the same time. The model illustrates the central idea around utility-based services enabled through on-demand provisioning to meet actual usage. It is commonplace for departments to request new servers for new projects, even though other departments have capacity that is going begging. And it can amortize the cost of problem-solving over a larger user base: the problems experienced by one user can, once they have been solved, be proactively fixed for all the other users of the cloud service. Using cloud services a€“ which were free for the low usage that was all he wanted a€“ he could quickly build a proof-of-concept program to demonstrate the idea to potential backers. The speed of cost reduction can be much higher using cloud computing than traditional investment and divestment of IT assets, as illustrated in the figure below. It enables enterprises to a€?land and expanda€? in markets with an infrastructure and service capacity that can grow with the business. The ready availability of machine intelligence in the cloud enables this customization to be delivered at a lower cost, so that serving the long tail becomes an economic proposition. Massively scalable services from cloud computing providers have the effect of driving down costs and prices, as the dynamics of competition are shifted by the presence of potentially rapid cost reductions.
Some of the gains must go into efforts to improve quality, if margins are to be maintained. It can be in your head, or can be captured by a more or less sophisticated computer modeling tool.
They have a straightforward decision to make between investing in a major data center upgrade and moving to cloud services. The cost of operating and maintaining the software application is considered unchanged in both the date center upgrade and the proposed cloud solution.
This is based on their current workload, and they increase it by 10% per annum to allow for the increased traffic that they anticipate.
These servers are massively under-utilized at present, and the proposal assumes a conservative server consolidation ratio of 6:1, so that the cloud servers will do the job of 60% of the servers that the group currently has. He admits that this would be a loss-making situation, but points out that 100% per month is perfectly possible also, and this would give a surplus of nearly $12M, just in the first year!
And there is no capital cost for buying development and deployment systems, which would add to the loss considerably if the product was a failure.
If CPUA and memory utilization are low then cost reductions can be achieved by allocating more workload to each resource. If there is an element of time-based payment a€“ a€?pay-as-you-goa€? a€“ then this may not be the case, and there may be scope to lower costs by tuning resource usage. These are all described for services that you consume under Establishing Requirements; the descriptions apply equally to services that you provide, which is what we are concerned with here.
It will have to borrow heavily to develop a new system a€“ which will be difficult in view of its worsening financial position. The system has not reached any CPU or memory limits, and has plenty of capacity to handle more business. The staff that would normally be able to handle the December peak can hardly manage the November workload. The crisis meeting decides to allow a higher level of resource provisioning to improve response time.
The quality indicator is good; despite initial reluctance, the companies that are using the new system are finding that it works well for them.
Corporate management decides to publicize the success stories more strongly, and to implement budget cuts for companies wishing to keep their in-house IT.
The average proportion of active widgets is 11% as compared with the 5% projected, there have been few subscription cancellations so far, and the widgets are being used in ways that had not been expected, indicating a larger potential market.
By comparison, midsize companies tend to be victims of inertia -- significant investments in internal IT resources and procedures make it difficult to justify the technical modifications and financial demands of a move to cloud. A private cloud represents the deployment of on-premises cloud services, generally building upon an existing virtual data center infrastructure with self-service portals, chargeback or showback models and additional services, such as automated provisioning or resource scalability. In Slide 2, for example, 90 respondents using public cloud currently have 25% to 50% of their data center infrastructure in the cloud. Fifty-five percent of respondents say application suitability can be a problem, forcing administrators to rewrite or convert a workload codebase for the specific cloud provider to which the enterprise subscribes.
So it may not be surprising that the principal driver for moving to private cloud was identical to that listed for moving to public cloud -- cost savings. However, they aren't mutually exclusive, allowing IT planners and administrators to realize the benefits of each model to fit the overall needs of the business. He holds a bachelor of science in electrical engineering, along with CompTIA A+, Network+, Security+ and Server+ certifications and has written hundreds of articles and more than 15 feature books on computer troubleshooting, including Bigelow's PC Hardware Desk Reference and Bigelow's PC Hardware Annoyances.
The servers that provide the service provide the same or other services to other users in other parts of the world and by sharing these resources the cost of delivering the service tends to come down although this doesn’t necessarily make it cheaper. They must be expressed in a language that end users can understand, and relate to investment, cost improvements, or business performance. It does not just mean the financial values, but can also mean customer value, seller value, broker value, market brand value, and corporate value. This chapter describes how each of these drivers contributes to ROI, and shows how to use them to compare cloud and traditional IT solutions, and how to monitor them to maintain and build ROI from cloud computing. As an indication of what can be achieved, enterprises that adopt private cloud as a solution are reporting server consolidation ratios of as much as 12 to 1. By doing this, using specially-designed application architectures, they can achieve better utilization of the underlying assets than if each client uses either a separate application instance on the same operating system or another virtualized instance sharing hardware.
With a ready-to-use cloud development platform, there was no time wasted on buying, installing, and setting up hardware and software. The issues of cost of ownership are often decoupled from choices made during selection of new IT, and the impact on the long-term running and maintenance of these IT services and subsequent business usage is not properly considered. Existing and new markets can be attacked and entered through speculative and well-timed interventions to exploit and grow business performance. Another is through offering additional a€?annuitya€? services a€“ essential or useful add-ons that are paid for; just as many printer companies make money from the ink cartridges rather than from the printers themselves. If you propose a cloud-based project, you will be asked how the ROI compares with that of a traditional solution.
Much of the model will be based on normal financial management factors, such as the relation between investment, revenue, costs, and return. To help them make this decision, they perform comparative ROI calculations for the two proposed solutions.
There is a well-known and successful Voice-over-IP supplier that, at the end of each call, gives the user the opportunity to comment on call quality through a simple web form. This increases costs, but not dangerously so a€“ and the December peak is then handled without any problems.
There is even one high-profile water-purification project where ready availability of cloud resource enabled the company to complete some crucial modeling work ahead of schedule. The bad news is that the growth rate in the widget population is only 25%, half of the 50% rate that was assumed.
A hybrid cloud connects both public and private cloud services, allowing a business to use both environments simultaneously while shifting workloads between private and public cloud facilities on demand. In addition, 29% note that a lack of interoperability or integration between cloud-based and local workloads can present problems. And, certain functions such as storage, collaboration tools and application development are taking the lead as primary benefactors of cloud computing. Revenue can be increased by improving the delivered features and quality a€“ which enable a higher price to be charged a€“ or by operating on a larger scale. Production versions could be tested in their deployment environment on the cloud, with no need to create special test-bed systems.
Some of these factors will be affected by considerations that are special to cloud computing. For both calculations, they assume that the costs are incurred during the first year of the project, during which time they continue with their existing IT systems, and that the benefits are realized in years 1 and 2 of the operation of the new system.
The IT costs are shown as a single broad category including specific factors such as audit and security. The proposal includes an investment of $5M to buy and deploy the cloud platform, and for the necessary re-organization of equipment. By contrast there is another provider that, though excellent in many respects, requires complaints on quality to be made to its help desk a€“ but there are many competing providers, it is easier to switch to a different one than to complain, and that is what some users are doing. The impact of this is that the project will make a loss of about $360K in the first year, but hopefully show a profit of $200K after two years, giving a ROI of 15%. The time from concept to launch was dramatically reduced, enabling the product to keep ahead of potential competition. Similarly, the software migration cost covers all costs associated with the migration, including legal and contract costs. It assumes that the running costs of the private cloud infrastructure will be the same as the running costs of the current infrastructure. The constituent companies of the group are resisting the adoption of the new cloud system, and it now looks as though only half of all projects will use it. Running a cloud infrastructure is more complicated, but the current costs of managing a siloa€™ed and not well standardized environment are relatively high, and these factors should balance out.



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Comments

  1. 04.07.2016 at 11:40:14


    Picks for any organization concerned likely.

    Author: TM_087
  2. 04.07.2016 at 19:59:22


    Wishing to run production applications in a public the Competition and Markets files and Transferring.

    Author: strochka