Cloud Costs, Pricing & Value: 21 Business Cloud Experts Reveal The Most Important Considerations For Evaluating The Price & Value of Cloud Computing

Much like the way that mobile technology has radically changed how companies handle the accessibility of their information, cloud computing has similarly had a profound impact on how today’s businesses store, process, and manage their information. This is of course due to the fact that, when used optimally, cloud computing for a business has the potential to save business leaders and employees alike a tremendous amount of time and money. And cloud costs and cloud pricing are a hot topic with cloud professionals of late.

As a company that specializes in helping companies find and implement the best cloud computing solutions for their business, we wanted to learn more about what a business might experience when they are first evaluating cloud computing, and specifically, what are the most important things to consider in terms of cost and value. To do that, we asked 21 business cloud technology experts the following question:

“What’s the most important consideration for businesses evaluating the cost and value of cloud computing?”

We’ve collected and compiled their expert advice into this comprehensive guide to understanding the top considerations for companies that are trying to evaluate how the cloud fits into their business. See what our experts said below.  After reading their thoughts – we encourage you to download our educational white paper: “The Top Secrets of Cloud Computing Pricing“.

 

Meet Our Panel of Business Cloud Technology Experts:


Greg ArchbaldGreg Archbald

Greg Archbald is the Founder & CEO of GreaseBook, an oil and gas technology company that is the only mobile oil field management solution built to run on an iPad.

In my experience, the most important consideration for evaluating the value of the cloud is…

Process.

With large organizations (requiring 50+ physical servers), the cloud certainly has a strong allure… and, it’s in these types of environments where Process becomes a HUGE issue.

From the approval specific platforms to the procurement of hardware, bottlenecks (virtual landmines!) seem to plague the teams of these companies every step of the way. More than anything, companies need to evaluate cloud on the terms of Process and whether the more effective infrastructure will help them better work within the given time and budget constraints!!


Kenny KlineKenny Kline

Kenny Kline is the CEO and founder of Slumber Sage, the leading source for sleep information and sleep product reviews on the web. Previously he was the founder and CEO MedPreps.com, which provides web and app test prep tools for medical professionals. Kenny has extensive experience with web and mobile development, digital marketing, SEO, and fundraising, and is also a graduate of Columbia Business School.

The reality is that almost all business are going to be in the cloud at some point. Costs are reducing, and processes are becoming more systemized for the transfer, so it’s really a question of when, not if. To best answer this question, businesses should consider…

Not only the implementation difficulty and costs, but also the ongoing maintenance.

A business needs to understand its ongoing capacity to maintain and improve upon how the organization utilizes cloud computing. For most implementations, you will need an ongoing person/team to tend to it and deal with support issues as they arise. Consider this added cost when thinking about whether now is the right time to switch.


Stuart BarrStuart Barr

Stuart Barr is the COO of HighQ. Stuart leads product strategy and innovation at enterprise cloud collaboration software provider HighQ. He has over 15 years experience in web strategy, development, management and consulting; with a unique background in the legal, professional services and social computing industries.

The most important consideration for businesses evaluating the cost and value of cloud computing is…

How a certain cloud setup applies to their culture and specific needs, whether it adds flexibility, decreases overall technology costs, etc.

A key benefit when it comes to cloud software is the fact that it is available immediately out of the box with virtually no lead-time. It’s quick and easy to set up and is constantly evolving and being upgraded, with upgrades deployed by the software provider with no effort necessary from the customer. This means they’re always using the latest technology without having to spend any more money. It also means businesses can easily switch to another provider if they’re not happy with the software they’ve got.

Most cloud software offerings are priced on a subscription model, which spreads the cost of the solution over monthly or yearly installments, which covers the costs of set up, migration and on-going technical support. Over the lifecycle of the software, this often works out cheaper compared to the initial cost of installing an in-house solution plus additional costs of maintaining, upgrading and managing the system.

Having said that, businesses must consider the best solution to suit their culture and specific needs. But the number of businesses moving key business software to the cloud continues to increase, with a growing proliferation of offerings covering various use cases such as email, document management, client relationship management, extranets and intranets.


Kevin O'BrienKevin O’Brien

Kevin O’Brien is VP of Marketing and part of the founding team at Conjur, an automated directory and authorization services platform that helps organizations monitor, manage, secure, and audit permissions across their entire cloud infrastructure. Previously part of the early teams at both CloudLock and @stake, Kevin is also a frequent speaker and Author on topics of cloud and digital information security.

There is an elementary set of advantages to cloud, which most organizations considering it will (and should) identify and cite when looking at moving some or all of their IT infrastructure to a hosted model:

The cost savings that come from not purchasing hardware that goes largely unused, not needing to pay for electricity, server room real estate, and support for the boxes and operating systems involved, and so on. However, the fundamental advantage is its ability to drive innovation at speed.

Consider, for example, at how Netflix describes their calculus for investing completely in cloud. Adrian Cockcroft notes in a Slideshare presentation that their shift to the cloud was predicated on the dual needs for high agility and high availability. Even more tellingly, Mike Kail (VP of Operations at Netflix) has publicly committed to remove all on-premise hardware in favor of public cloud technology in 2014.

This is the value of a cloud deployment — not just cost savings or transactional improvement, but the transformative impact that increasing speed on demand (“elasticity”, in cloud speak) can have on a business. There is a movement that has arisen within the last two years around this idea: DevOps, a portmanteau of “development” and “operations”.. Based on the thesis that modern companies can learn from the optimization efforts of the 1980s and 1990s in the automotive industry, DevOps represents the promise of cloud computing to lower the barriers to continually releasing software, gaining market feedback, and adjusting as needed.

 


Eric-JefferyEric Jeffery

Eric Jeffery is the Founder and CEO of Gungon Consulting, a small consulting firm with focus on small and medium sized business. The firm’s services provide assistance in the critical areas of IT security, system availability, off-site infrastructure solutions as well as operational efficiencies and productivity enhancements for their clients.

One of the most important considerations that companies moving business to the cloud must understand is…

The impact on their human resources.

If they plan to move services to a 3rd party, will they keep staff? If so, where is the true savings? A clear TCO and ROI analysis must follow any move to cloud computing.

Businesses also must know if their provider offers all the services they need. Example would include moving to VoIP from a hosted partner, does their offering have everything covered by your in house phone team?


Mike-SalemMichael Salem

Michael Salem is the Co-Founder and CEO of Vorex PSA, an all-in-one cloud-based system that provides small-to-midsize businesses affordable solutions for project management, time and expense tracking, billing and invoicing, CRM and HR services. Under Michael’s leadership, Vorex has grown to become a leading provider of cloud-based PSA solutions. The company provides cost-effective, user-friendly software solutions to help small- to mid-size businesses streamline operations, automate time-consuming tasks, and improve the bottom line while focusing on their core business.

The most important consideration for businesses evaluating the cost and value of cloud computing is…

Know where your time and money is being spent.

Not accurately tracking your resource allocation could be the difference between running a profitable business and closing your doors. Regardless of the type of business you run, you should consider tracking your clients, projects, resources, time, and invoicing in a single online solution that will keep you organized with a full 360 degree view of your operation.


Richard HaydenRichard Hayden

Dr. Richard Hayden is Vice President of Marketing and Product Management with Unanet, a leading provider of Cloud or On-Premise software for project-based organizations. Richard has over twenty-five years experience of domestic and international marketing at enterprise software companies located in the US and Europe. His expertise in the project and process management software industries helps Unanet determine the strategic positioning needed to successfully market its product line.

Adoption of cloud software is now a strategic choice for leading organizations, rather than driven simply by technical or cost factors. That said, the most important consideration for a business considering the cost and value of the cloud is…

How the adoption of the cloud can immediately affect your business’ short-term and long-term profitability and productivity.

Only a few years ago, a majority of organizations adopting the cloud did so for either of two reasons:

1. They lacked the skills in house to install and maintain enterprise software infrastructure such as web servers, SQL databases etc.; or,

2. They had an urgent need to stand-up an application and the cloud represented the fastest way to do that, but in the long-term they expected to bring the system in house.

In 2014, very large, and IT-knowledgeable organizations are adopting cloud-based software for other reasons:

1. The ability to support their information technology needs in a highly scalable way

2. A desire for Operational Expenditures versus Capital Expenditures – incremental cost rather than upfront license fees and hardware costs

3. Higher availability and enhanced security for remote access, and

4. Most importantly, enables their own expert IT staff to focus on higher priority areas, whether strategic improvements or billable work, rather than just keeping current systems operational.


Ian-StoneIan Stone

Ian Stone is the Managing Director, UK and Ireland, of Anaplan, a San Francisco-based cloud business planning and technology company. Ian’s role includes responsibility for sales, pre-sales, marketing, consulting, support and operations. He has over 15 years experience working in enterprise performance management and is widely considered an expert in EPM application across the sales function.

The most important consideration for a business considering the cost and value of the cloud is…

Realizing the cloud’s ability to “level the playing field”, and how that key benefit can be a game changer for a business.

By removing much of the initial up-front costs, the cloud allows small and medium businesses to compete with their larger rivals – and in some instances, to surpass them. But large businesses shouldn’t feel restricted by legacy systems.

The ability to use the cloud to identify new opportunities and efficiencies isn’t just for the new kids on the block – the key is determining exactly where cloud can deliver the greatest value. For me, there are three qualities the cloud brings to IT: first is scale – the ability to handle almost limitless volumes of data in milliseconds. Second is ubiquity, as cloud solutions are available anywhere, on any device. The third is user centricity, as the technology should be easy for all employees to access, understand and maximize.

If you’re still using old, standalone planning applications from the mega vendors, take some time to get some insight into how new technologies are emerging and ‘breaking the mold’ of traditional planning systems. Management teams across the world are becoming increasingly dissatisfied with the quality and timeliness of management information and are now turning to cloud based solutions, enabling them to plan, collaborate and act—in real time.


Juan SotoJuan Soto

Juan Soto s President of IT Impact, Inc., one of the largest MS Access companies in the world, providing sought after business solutions for successful companies. He is also a Microsoft MVP, touring the US and the Caribbean helping the data community with a wide range of issues.

The most important considerations for a business considering the cost and value of the cloud are…

1. The fact that your data is already on the web, and is available to anyone legally for just a few dollars. The fact is it’s almost impossible to live in our society without leaving some sort of digital crumbs online.

2. The possibility of web-enabling MS Access databases to cloud hosting. The value in this is that you always have an online back-up that is safe from any damages or theft that can occur to your hardware. After all, if you lose part or all of your data, it may be a big enough cost for your business to not recover.

3. The fact that a web-enabled interface will take your business to the next level in performance, usability, and interconnectivity. Staff, clients, and vendors call all access up-to-date information via the cloud from anywhere. This not only gives companies a competitive edge, it creates an exceptional customer experience. It is especially beneficial for companies with employees working remotely.

4. The cost of switching over to cloud computing will vary, but what we commonly see is that businesses already using an Access database eventually face the option of switching to a more powerful database or web-enabling your software to eliminate the high costs of hiring consultants, programmers, and buying new hardware by taking what you have, and improving on it. Your return on investment date will be much closer in the future than coughing up the big bucks on a new system.


Joe BudelisJoe Budelis

Joe Budelis is the Founder, CEO, and Telecom Consultant at Persimmon Telecommunications who helps organizations decide on the best Telecom Carrier service and Cloud services for their needs. He represents over 100 carriers and specializes in solutions for US based organizations to include DSL, Cable, T1, DS3, Fiber Ethernet, MPLS, SIP, and other data and voice circuit solutions as well as various flavors of Cloud Services.

The most important consideration depends on which cloud computing service your business is considering….

For example, one of the most valuable cloud services is BDR – Backup and Disaster Recovery. Consider what has happened historically to businesses that have no BDR plan in place. A majority of those whose IT infrastructure was destroyed (by Katrina, Sandy, a tornado, a fire, a plumbing disaster from the floor above, a disgruntled employee, or whatever) never recover – they go out of business.

The most important consideration is how long the business can afford to be without their servers and other IT infrastructure. With no BDR plan in place, a business with one or more critical servers is likely to take a minimum of days or weeks to get the servers back up and operating as required for business operation. There are various BDR options available that can reduce that time to hours or minutes. As you would suspect, the shorter the recovery time, the more expensive the BDR service.

Another cloud service is Hosted PBX service. To some organizations, it will be most important to attempt to put some value on the additional functionality of the Hosted PBX. To others, the cost comparison will be more important – in this case, it’s most important that total costs be compared.

Although a Hosted PBX involves a monthly cost that goes on forever, cost of a premise-based system includes purchase, installation, maintenance, upgrades, and eventual replacement. For many premise-based systems, an organization finds that it has to call in and pay a PBX expert to accommodate changes as to how the business is using the system. And there is the convenience of having one customer service number to call whenever assistance is required for use of a feature or for debugging a problem.


Alan GuinnAlan Guinn

Alan Guinn is Managing Director and CEO of The Guinn Consultancy Group, Inc., based in Bristol, TN.

In my estimation, one of the most difficult leaps that so many businesses have in moving data to the cloud and something that is important to consider is…

The integration of material in a meaningful format.

In discussions about their transition to the cloud, many of my clients have thought that the transition represented a “one pushbutton sequence, ” which of course, it’s not. Integration of multiple platforms and legacy systems, information blend and the ability to correctly assess the data stream developed in a meaningful way can create barriers to change and freeze well-developed plans and opportunities.


Tim GriffinTim Griffin

Tim Griffin is the Founder and CEO of Userful, a pioneer in desktop virtualization with client computing. Userful is the trusted provider of over 1 million virtual computers in over 100 countries including the world’s largest digital inclusion project with the Ministry of Education in Brazil. Its solutions compliments any cloud computing environment with ultra low cost virtualized computing.

One important thing that most organizations transitioning to cloud computing often forget to consider is…

The cost of the physical devices that the organization must adopt to access the cloud.

It’s another opportunity to save huge on infrastructure costs. While mobility continues to increase and with data in the cloud, there’s an opportunity to decrease the cost of desktop computers and digital signage throughout any work space by adopting entry-level virtualization solutions with client computing. They let you deploy many more physical computers and digital signs for a quarter of the cost of a traditional one device per person model without sacrificing performance, especially with multimedia. This makes sense if you’re transitioning to the cloud because as all your data lives in the cloud, the device you use to access that data no longer matters as much, and in fact, the number of devices each person will have access to will continue to grow.

Virtualization with cloud computing basically gives your organization the ability to offer many more access points to access the cloud. If you choose the right solution, you also don’t need to have expensive IT resources to deploy your infrastructure so it’s ideal for the small and medium business or any organization looking to save on hardware and electricity costs in conjunction with its software savings it will achieve by moving to the cloud. Cloud computing is all about consolidation and so is virtualization – but of your physical devices. It’s a perfect pairing.


Brandon MetcalfBrandon Metcalf

Brandon Metcalf is the Co-Founder and Chief Operating Officer of Talent Rover, a software-as-a-service (SaaS) company that aims to modernize the staffing and recruitment industry. He leads all aspects of the business, including day-to-day operations, development, sales, marketing and strategy. Today, Talent Rover is used by staffing and recruitment firms in every region of the world. Brandon oversees this global expansion, including operations at Talent Rover’s offices in San Francisco, London and Dublin.

For businesses evaluating the cost and value of cloud computing, the most
important consideration is…

To distinguish hosted solutions from real cloud solutions.

Because “cloud” is such a hot buzzword, many vendors claim to offer a cloud solution but actually offer a hosted solution. This usually means there’s one building with one server room and you maintain and purchase your own software.

True cloud solutions have multiple server environments, software is delivered over the internet, not installed on your computer, and—here’s the key—multiple datacenters back your data. If one datacenter goes down, your data is safe, and your business can still operate. You have to cut through all the marketing jargon and make sure your “cloud” vendor is delivering this value.

Finding a true cloud solution versus a hosted one is particularly important if you run a global business. The further you travel from the hosted datacenter, the more the speed and performance of your solution will suffer. Global cloud solutions will connect your users with the nearest datacenter. This is why we built Talent Rover, our staffing and recruitment solution, on the Salesforce Platform. They’ve invested in multimillion-dollar global cloud infrastructure, and we wanted our clients to take advantage of it.

So if you’re evaluating cloud computing solutions, do your homework.. Make sure you know what you’re getting from a “cloud” vendor. Ask questions about their infrastructure, locations, security measures and backup practices. The costs will always be lower than owning your own datacenter. Just know what you’re buying.


Keyon ThomasKeyon Thomas

Keyon Thomas is Marketing Director and Partner Manager at InfoStreet, Inc., a role that he has held the past seven years. An adamant proponent for cloud technology and the growing mobile framework, Keyon enjoys working in an ever-changing technological landscape. Currently Keyon is focused on helping companies view the advantages of the cloud and determining how they can implement a cloud strategy in their own organization.

As many companies start looking away from older, on-premise technology and towards the cloud, one of the most important considerations that they must keep in mind when thinking about the savings that the cloud will bring is…

The human capital costs.

Moving to the cloud is not just a one and done scenario. Often you have to deal with both a technology shift as well as an adjustment in business processes. The cloud significantly changes the way you do business and the following two items are the most important considerations to keep in mind when considering moving to the cloud.

The first thing to consider is a shift from the typical 8-hour work day to fully balanced work/play lifestyle for your employees. The cloud enables you to access your software anytime, anywhere, and, in most cases, on any device. This changes how you will interact with customers and how your team members view the work that is in front of them. You’ll need to make sure that your team is prepared for that shift.

The second consideration is the traditional shift that happens when you switch to any type of new software. The interface will be different, your processes will have to change, and your employees will have to learn all the ins and outs of each new tool. But there are benefits to these changes. In the case of the cloud, more of your technology will now be interconnected and integrated, which will ultimately speed up work and processes.

At the beginning, this is a change that will slow your team down as they adapt, but you’ll have to make sure that your team doesn’t fall back to using old technology as a crutch. That crutch can easily lead to a break in transitioning to the cloud, ultimately extending the implementation and increasing the actual cost of moving to the cloud.


Ivo VachkovIvo Vachkov

Ivo Vachkov is a Software Engineer for Xi Group Ltd, a high-quality DevOps services company with experience in OS Development, Large-scale distributed systems, payment processing systems and recently Big Data. Currently challenged with Cloud deployments scaling up to thousand nodes each day, implementing the “Aggressive DevOps” concept as the core of Xi Group’s mission and leading principle.

When it comes to considering the cost and value of the cloud, my take on this is…

The Cloud does provide value to the business in multitude of cases:

  • Easy provisioning of resources*: You can bootstrap IT infrastructure in a matter of minutes.
  • Common repetitive tasks are (somewhat) provided and automated: In many cloud providers your database will be automatically backed up or a slave instance can be easily started.
  • Easy access to multiple geographic regions: Many cloud providers will give access to different geographic regions right from the start. Data locality is definite value when providing real-time or close-to-real-time type of service.
  • ‘Scale Up’ elasticity: One can start small with cheap instances / little resources and add more as the need arise.
  • ‘Scale Out’ elasticity: Probably the most important offering of the cloud providers. With proper IT architecture your infrastructure can be a ‘living thing’ always evolving to match the resource requirements of the current user population.

However, there is a definite cost:

  • Bad capacity planning will lead to over-provisioning, i.e. money being spent without resource being used.
  • Bad IT/software architecture will prevent companies to scale out (many cheap instances), leaving them only the option to scale up (small number of pricy high-end instance types).
  • Vendor Lock-Down: Using provider specific features may prevent you from switching to other service providers that lack similar offerings, but can offer you better per-hour price. Example: AWS has several unique offerings (RedShift, Kinesis, SNS, etc) and utilizing those in IT infrastructure makes it impossible to migrate to providers that lack those features.
  • Special hardware needs: Specialized hardware is not common in the cloud (yet) and if there is such, it’s pricy. Example: AWS offers GPU optimized instances, but if you need to run those 24×7 for many months…you better get the real hardware. You’ll break even in half a year.

So, when considering whether or not to switch to the Cloud, one should answer the following questions:

1. Do we have elastic IT and Software architecture?
2. Do we have changing or static usage patterns?
3. Do we utilize only commodity hardware?

If the answer is all ‘YES’, then it may be beneficial to migrate to the cloud. Otherwise, self-hosted solution may be more optimal choice, money-wise.


Aaron RossAaron Ross

Aaron Ross is a Cloud Expert and the CEO / Founder of Ross Backup, an automatic cloud based backup service with outstanding customer service. Aaron began working with small businesses as an IT specialist right after college and it was around this time that he became fascinated with the concept of backing up information. His first backup was to a 10 GB hard drive and it still took over 14 hours for the backup to complete. It was his motivation to make the process simple, fast and inexpensive that led him to start Ross Backup.

When considering the cost and value of the cloud, a typical company needs to worry most about…

Security.

Can a low level employee easily access confidential files? How secure is the information? There is definitely a substantial financial savings when using cloud computing, as you don’t need to maintain the infrastructure or even require as many IT personnel. However, most companies would be very hesitant to make the switch at the expense of their secure network.

Many businesses take for granted the security of the cloud, but there are numerous issues that need to be considered. When using cloud computing, in essence, you are storing your company information and copyright applications on systems not directly under your control. Making matters more complicated is the migration process. Whereas it’s not very difficult to migrate *to* the cloud, switching back is an entirely different ballgame. As any IT specialist will tell you, it’s not really feasible to do a “trial run” in the cloud for that reason.

While there are many pros to switching to the cloud, including financial savings, healthier environmental footprint and easier remote access, it seems that many of the larger companies are still hesitating. The security breaches at Target, T.J. Maxx and others are still reverberating in our hearts, and holding us back from making the leap to the cloud.

So who can make the transition? Small companies that aren’t as concerned about security won’t have much of a problem. If your server room is unlocked, chances are the cloud will actually be safer for you. Certainly consumers can use the cloud without worrying too much – though by all means, use a good password for access to your data.


Edward KiledjianEdward Kiledjian

Edward Kiledjian is Chief Information Security Officer of Bombardier Aerospace, and has 20 years of international experience as a Technologist, Management Consultant and Security Evangelist. Learn more about Edward and his work at http://kiledjian.com/.

Cloud computing can become a strategic differentiator for many companies if used properly. Businesses who are evaluating the cost and value of cloud computing should consider these facts…

It increases a company’s responsiveness by being able to quickly scale capacity on demand (to meet a deadline or when entering or exiting a market).

It simplifies connectivity between its digital assets and its partners, suppliers and globally distributed employees, without having to spend a huge amount of time and money designing complex connectivity systems.

It allows companies to focus on their core business differentiators, instead of spending time and money on commodity services (like email, intranet servers, instant messaging platforms, etc).

In many cases, a carefully chosen cloud provider may be able to deliver a much more secure computing environment than anything a company’s internal cash and resources strapped IT group could ever.

So in summary, cloud can reduce costs, shifts CAPEX expenses to OPEX , increase agility and scale globally.

Areas that require special consideration when investigating cloud initiatives include:

1 – Security of the digital assets “in the cloud” and any compliance complications.

2 – Issued of data privacy, ownership and geo-location must be understood.

3 – Service Level Agreements related to performance & uptime must be agreed.

4 – Vendor lock in: The cloud vendor may allow you to export your data but often, said data becomes useless without the supporting business logic, which is owned by the cloud service provider. A detailed backup and transition plan must be in place before moving your critical business functions to the cloud.


Jeff FrankelJeff Frankel

Jeff Frankel Vice President of Business Development at docSTAR, a B2B software firm specializing in cloud document management solutions and business process automation.

The most important consideration for businesses evaluating the cost and value of cloud computing is…

What is included in your cloud computing package, and more specifically, everything that would contribute to the total cost of ownership.

Cloud computing is perpetual which means overtime – you might spend more than you might otherwise spend if you leased or purchased the software. That being said, software upgrades and updates are generally included in the cloud monthly fee. This is not the case when you purchase or lease on-premises.

On-premises will add additional annual maintenance cost and software upgrade uncertainty. Further, (this is a huge plus for cloud), you generally get enterprise level software at a very affordable entry level price, i.e. Office 365, Salesforce.com and docSTAR. Make certain you evaluate the total cost of ownership including bandwidth (speed) and uptime.


Stelios ValavanisStelios Valavanis

Stelios Valavanis is the Founder and President of onShore Networks. He currently serves on the boards of the ACLU of Illinois and We the People Media, and advisory committees for several other organizations. He has appeared as a guest lecturer and panelist for local colleges, non-profits, and various industry events. Stel graduated from the University of Chicago in 1988 with a Bachelor’s degree in Physics. Prior to founding onShore, Stel held a number of technical positions at the University of Chicago.

The most important consideration for business evaluating the cost and value of cloud computing is…

Functionality and integration.

Sure, if you’re starting from scratch, you can build around a set of tools, cloud tools ideally. But that’s typically not the case. I’ve migrated clients off of MS Exchange for instance, hoping to move them to a cloud version only to find there’s a custom plug-in in use so we have to custom host.

Other clients have had to develop process for regularly importing/exporting data or contacts from cloud tools. Backup and retention can no longer be centralized so you’re reinventing multiple pieces of the puzzle. This hasn’t been the biggest reason there hasn’t been faster adoption. It should be. Usually companies just look at cost including that of increased bandwidth and do or don’t see it add up. They need to look at functionality first and not just the obvious parts on the surface.


Mark HerschbergMark Herschberg

Mark Herschberg is the CTO of Madison Logic, the leading provider of B2B intent data solutions. He’s led the technology and strategy at companies ranging from 3 to 300,000 people. Mark also teaches at MIT, advises numerous startups and is on the Advisory Board of the Museum of Math in NYC.

The most important consideration for business evaluating the cost and value of cloud computing is…

TCO (total cost of ownership)

While it’s easy to calculate the hardware cost, and not much harder to figure out operational savings from not physically owning servers the key calculation that many people miss is the value of flexibility.

Want a to prototype a system with 6 servers? You can set that up in an hour and run it for a few days at a cost of $80, instead of waiting days or weeks to provision or order new hardware and needing to spend thousands of dollars. It’s always been too costly to implement replication your full production system on staging since a full staging system increases costs by 100%? Now you can spin up a full parallel system only the hours you need–if it’s just 10% of the time (obviously it doesn’t run nights and weekends and probably not full time during the week), your staging system is now 10% of the cost, not 100%.

Wish you could run a load test on the new server your team wrote? Spin up the three machines you think you need in production and then however many more cloud servers to put load on them and try it out. Test didn’t go well? Try again with more powerful servers.

The hidden value of these systems is the ability to dynamically and cheaply allocate resources, for a business that’s growing or changing, this can prove to be as valuable as the actual cost savings.


Jordhy LedesmaJordhy Ledesma

Jordhy Ledesma is the CEO and Founder of Information Providers, a research-driven digital agency targeting Latinos online. Mr. Ledesma has been a critical social media and web development consultant for such big names as The Miss Universe Organization, UNESCO, Verizon, Xerox and Dale Carnegie Training. As reported by Bloomberg Businessweek, his latest research work, the best-selling business case “Investing in Language Learning”, presents a new financial model that helps Best Buy and Rosetta Stone allocate funds towards language learning for customer service representatives in order to better serve the Latino market.

The premier metric when evaluating cloud computing options is…

TCO or total cost of ownership.

Total cost of ownership includes things like how much you are spending in the technology the cloud solution would potentially replace. This includes expenses such as salaries, cost of electricity, back up solutions and licensing costs. When you add all these and compare your TCO with the cost of your cloud-computing provider is the difference significant? Is it moderately significant or major?

CIOs and IT managers should also take into account the value of intangibles such as reputation, location and track record of the cloud computing provider. All these intangible factors have tremendous impact when security breaches occur.

A sound cloud strategy can make your company more efficient and secure so don’t hesitate and start considering solutions right away. It’s one of the biggest and most important computing trends of our time.