Factors to Consider When Developing a Cloud ROI. Michelle Olson

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1 Factors to Consider When Developing a Cloud ROI Michelle Olson

2 Return On Investment (ROI) The calculation for return on investment can be modified to suit any situation. It all depends on what you decide to include for your analysis. There is no one "right" calculation. It is also important for you to decide what level of disaster recovery plan you envision for YOUR company. What is acceptable to you?

3 Factors to Consider Summary Capital Expenditures vs. Operating Expenditures Location of the Data Infrastructure Security & Audit Staffing Licensing & Billing Going Green

4 CapEx vs. OpEx Capital Expenditure - Deductible over time (36 months) - Large upfront costs - Multiple vendors (many) - Managing assets Operating Expenditure - Immediate deductible - One vendor (or few) - Monthly billing - Easy to budget ($ = user)

5 Location of the data Currently under a desk or in a closet? - Disaster Recovery Plan? - Where in U.S.? Floods, Hurricane, Katrina - Remote access? Boston Bombing Do you rent space at a Data Center? - Cloud providers can get reduced rates based on the amount of space used - Can you consolidate? - Long term leasing? - Power and cooling, and any networking costs Have you considered moving to a Data Center? - If so, what are the costs for the move?

6 Infrastructure Do you need to purchase additional hardware? - 3 year life cycle - Lease or Buy? What is your long term strategy? - Growth? Merge? Do you have redundancy built in? - Could you or would you do this the same plan in-house? - What is acceptable down time? Cloud provides the ability to scale up or down as needed quickly High cost upfront can be barrier for new businesses

7 Security & Audit Do you provide services that require an audit by a 3 rd party? Compliance needs? - HIPPA, ecommerce Is your Cloud provider SSAE16? - With Cloud provider you can hand over SSAE to reduce time and risk for your company - Yearly cost Is your team educated and proactively monitoring security threats? Do you have physical security of your data? Cloud offers world class security on a small business budget

8 Staffing How many people on staff today? What do you envision in 3 years? Cloud provides one-neck philosophy - Can contact provider 24/7 if services are not available - All applications become mission critical With Cloud, you can consolidate resources and/or allow staff to take on new tasks Don t need to know it all - You have extension to your team - Applications, SQL, networking, security

9 Licensing & Billing Tracking Licenses - Administrative tasks - Microsoft audit - Do we have enough licenses? - Can reduce and increase as needed - Can lease vs. purchase Flexible billing - Cloud helps budget with pay-as-you-go services - Requiring no long-term commitment

10 Going Green Tax Breaks: Businesses will be on the look-out for ways to reduce their carbon emissions given the recently introduced carbon tax. Shifting to the cloud could be one way of doing this, particularly if further incentives are made available for green businesses in the future. Tax breaks coming for moving to Cloud provider (state of CA already reviewing and making strides). Conserving Energy: You save energy through resource pooling. Doing away with large, overheating server closets expands the life of your computers, cuts IT costs, and decreases your environmental footprint. Becoming a green business means more than just eliminating paper. It is about eliminating waste and reducing energy consumption. One easy step towards going green and significantly decreasing your carbon footprint is to eliminate or reduce energy-consuming on-premises equipment and move your IT to the Cloud. Telecommuting: With the ability to work from anywhere at any time on any mobile device or computer, your employees have the option to work from home. Cutting out the fuel emissions from daily commuting contributes to the global green movement. If a daily telecommuting model works for your organization, you can also cut both costs and energy use on office space real estate. In the U.S. alone, cloud computing will reduce carbon emissions by almost 86 million metric tons per year by 2020, generating a potential energy savings of more than $12 billion/year. Businesses, both established and start-ups, large or small can all go Cloud, and go green, at the same time.

11 Factors to Consider Summary Capital Expenditures vs. Operating Expenditures Location of the Data Infrastructure Security & Audit Staffing Licensing & Billing Going Green

12 Questions Michelle Olson Cloud Services Manager

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