While the answer will be different for every organization, but the parameters fall into a combination of five areas:
- ROI - some organizations can show an ROI for moving infrastructure and applications to the cloud. Typically, the cost savings come from reductions in employee costs (harder to justify since the downturn in the economy in 2009 when many companies cut IT resources and possibly reduced service levels). There are some potential savings from CapEx avoidance on refreshes, potential cost reductions from colo-sites. I have built a fairly elaborate model that always needs tweaking based on a specific business situation.
- Agility - I believe this is the real the driver behind the long term growth of cloud. More today than ever before, businesses are required to respond rapidly to competitive changes and business opportunities. The legacy model of IT that is slowed by CapEx anchors of previous purchases and the availability of IT resources within the organization reduces agility. Cloud is the newest method of outsourcing IT with portentially a new benefit of varying cost and changing vendors more easily. There are immediate agility benefits from a move to cloud. The ensuring that business remain agile with a transition to cloud requires planning and management.
- Improved Service Levels - Cloud vendors will live or die based on their service levels. Even AWS will need to have improved availability and MTTR going forward. The ability of an internal IT organization to justify the cost of improved service levels has always been limited because it is managed as a cost center. Regardless of the size of an organization, I find that there are never enough IT resources. IT as a The shift to cloud will deliver the SLAs that are desired at an economy of scale that most businesses cannot afford. Improved service levels will also come from cloud vendors having more resources, more specialized resources.
- Improved Data Security - Yes, I said better data security in the cloud than in the enterprise. As a CTO of an IaaS cloud, I knew that we had to be better than the internal IT organization at protecting data. I also know, having been inside many businesses, they they actually struggle to achieve the data security that they demand of cloud vendors. Transition to cloud is good for all in this area as well.
- Improved BCP/DR - Many organizations are required to have business continuity plans, disaster recovery plans and an ability to execute on them. Even some privately help companies that do not have compliance requirements driving them in this direction have decided that it is smart to have this insurance policy to ensure survivability. Virtualization and cloud make BCP and DR much easier and provide many more options for controlling the cost of a BCP/DR program.