A great number of companies have responded to developing trends by taking steps to encourage cost reduction and to leverage the adoption of cloud-style services by IT service providers. A cloud-style approach has been rigorously explored and adopted by a number of industrial organisations and top IT providers of software, hardware, and services in an effort to fulfil the requirements of the companies' respective customers. The move from the existing conventional IT to the new capabilities that cloud computing has the potential to provide presents a number of difficulties and problems. They have to be written in a manner that end users can comprehend, and they have to link to either the improvement of corporate performance or an investment in lowering costs.
Return on Investment, sometimes known as ROI, is one of the most common ways that businesses evaluate their level of financial performance. This is the method that you and others will want to use to evaluate your plan to employ cloud computing instead of in-house information technology (IT). How do you do this? What aspects of cloud computing have an impact on the return on investment (ROI)?
ROI, or return on investment, refers to the rate at which the value of an investment rises proportionately over a certain amount of time. It is possible to evaluate it using a wide range of approaches, but there are really only four fundamental methods to boost it: cut down on the amount of money invested, boost the amount of money made, cut down on the amount of money spent, and speed up the rate of return. You can do any of these things by using cloud computing; but, you cannot accomplish all of these things at the same time.
It is not the values themselves that are important, but rather the interaction that each aspect has with the others. When you go to the public cloud, you will often reduce your investment but raise your operating expenses. In the case of a private cloud, things work in reverse order. Depending on the amount of income generated and the rate at which it is returned, the ROI on cloud assesment may either increase or decrease. Either by expanding operations to a greater scale or by bettering the characteristics and quality of the product that is being sold, both of which make it possible to set higher prices. This results in an increase in revenue. However, increases in features, quality, and size almost always result in a corresponding increase in expenses. You have to find the proper middle ground.
If one just considers cloud computing from the perspective of its underlying technological infrastructure, one runs the risk of missing the bigger picture of the effect that technology has on the company. Determining the value to the company is the most important thing overall. The concept of value may be understood in a variety of ways. It is possible to signify customer value, seller value, broker value, market brand value, as well as corporate value when referring to this concept; it is not limited to only referring to monetary values. These are not things that should be overlooked.
What kind of return on investment may be expected from using cloud computing? Utilizing cloud services may have a favourable effect on a variety of basic factors, including investment, revenue, cost, and time. These drivers have an impact on the business as a whole. Productivity, speed, size, and quality are all related concepts here. This chapter explains how each of these drivers contributes to ROI, as well as how to utilise them to compare cloud computing and conventional IT solutions, as well as how to monitor them in order to maintain and increase ROI from cloud computing.