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How Well Do You Use Cloud Economics In Your Cloud Strategy?

Posted on 13 august, 2015

Chief Strategist, Cloud + Enterprise
Is your cloud strategy centered on saving money or fueling revenue growth? Where you land on this question could determine a lot about your experience level with cloud services and what guidance you should be giving to your application developers and IT Ops teams. According to our customer research the majority of CIOs would vote for the savings, seeing cloud computing as an evolution of outsourcing and hosting that can drive down capital and operations expenses. In some cases this is correct, but in many situations the opposite will result. Using the cloud wrong may raise your costs. But this isn’t the crux of the issue, because it’s the exploration of the use cases where it does save you money that bears the real fruit. And it’s through this experience that you can start shifting your thinking from cost savings to revenue opportunities. Forrester surveys show that the top reasons developers tap into cloud services (and the empowered non-developers in your business units) is to rapidly deploy new apps and capabilities. And the drivers behind these efforts – new services, better customer experience and improved productivity. Translation: Revenues and profits. If the cloud is bringing new money in the door, does it really matter if it’s the cheaper solution? Not at first. But over time using cloud as a revenue engine doesn’t necessarily mean high margins on that revenue. That’s where your experience with the cost advantaged uses of cloud come in. Here is where Azure Marketplace partners such as Cloudyn, CloudCruiser and others can really help you optimize your cloud spend. You can also go it your own by leveraging the recently published Azure billing and rate card APIs. There is a discrete thought process and experiential path CIOs go through to reach these conclusions which Forrester has documented in my research report, “The Three Stages Of Cloud Economics.” Like with many maturity models, your organization must gain experience in the first stage to understand and start reaping the gains from the latter two which are where savings turn into profits. You can’t afford to pass up the opportunity cloud computing presents for turning IT from cost center into revenue driver. Get your hands dirty and start evolving your thinking and your cloud use.