Cloud is Not a Cornucopia of Savings

Jun 8, 2012

CIOUpdate Contributor

by Barbara Rembiesa, CEO of IAITAM

Organizations that chose to “go to the cloud” do not necessarily bring about dramatic savings and IT efficiencies that outweigh or eliminate the need for asset management. In fact, the adverse effect may be the case based on the added risk surrounding data security, access, data transfer and backup along with agreements that include terms that are unclear or misunderstood by parties unfamiliar with this new licensing model. This in turn may lead to an increase in resources at every level.

Cloud licensing models are not new

Cloud computing is the newest trend in software licensing, but truly the base model for cloud licensing has existed for some time. It’s a new twist on a billing model that has existed since mainframes came into existence -- capacity based computing. The difference in this new model is the vast array of service providers, complexity in licensing schemes and of course the formidable drive aimed at taking more of a share of your organization’s IT budget and creating a reliance on outsourced service providers.

There is much debate in the marketplace on savings opportunities based on migrating to the cloud outside the enterprise. Most CXOs say that the cost savings are extremely important when considering migration to the cloud. Based on IAITAM research though, few companies have realized the projected savings. This could be attributed to poor pre-planning for the implementation, failure to calculate true ROI, or simply the savings are not there.

Many cost factors not considered are:

  • Ongoing training for internal staff and external resources on organizational requirements;
  • Legacy systems and the integration necessary to be fully functional;
  • Compatibility issues whether they were “oversold” or improperly assessed; and
  • Uptime and productivity to fit the needs of the enterprise.

Instead of looking at the terms of the agreement for your savings, take a long look at your business needs and what drives your business. Are you looking purely for financial savings and a reduction in IT overhead? Are you looking for increased productivity? Are you looking to mitigate risk from internal unmanaged assets?

Let’s take a closer look at items to consider for those three business drivers:

Financial savings -

  • Will your hardware be affected? Will you need to replace existing systems or will there be a reduction in on-premise assets?
  • Will your software cost go down? Will your existing licensing schemes change or will there be added software necessary to reach out to the cloud?
  • How are you being billed? Do the charges show a savings in comparison to your internal SLA’s?
  • Is ongoing training included?

Increased productivity -

  • Is the ability to access data easier? With this ease of access does it also create a new security risk that did not exist previously?
  • Will your staff be more efficient? Will the cloud applications and hosting provide your workers with efficiencies that were not available with the enterprise’s environment? Will there be more complications to data access because of the increased security protocols?
  • Is access to your data time sensitive? What provisions are in place to ensure that the data is available when needed?
  • Will roles change within your organization? How will this affect your IT support team, IT asset management (ITAM) or end user business units? Will there be a decrease in staff or will they shift roles because of added oversight needed?
  • Who will manage the data? Is there an internal team dedicated to oversee  operations and audit? Who will manage back up and restoration? How does this model fit into your disaster recovery program if one should impact either your facilities or those of the cloud provider?

Risk mitigation -

  • Is your data more secure? Does the outsourced model add or maintain the security for your data in accordance to your security requirements?
  • Do you reduce the risk of software noncompliance or increase it? How does this shift in licensing affect your current software configurations? Does it require you to purchase additional software to support access to your outsourced data or a combination of software and upgraded hardware to access the cloud solution?
  • Will you need additional ITAM or additional security measures to safeguard new device types? Does your organization have policies regarding data access for employees, and how about non-employees or contract personnel?
  • Has the new model been adequately tested and vetted to guarantee that it meets or exceeds your current data security standards?
  • Who owns the data?

The above obviously is not a full list of requirements when considering moving to the cloud but, instead, a few thinking points to allow you to build a full list to incorporate into your return on investment calculations.

In a dream world, everyone could move to the cloud and find tremendous savings and never have any down time; but remember, just like software applications, there is no silver bullet or one-size-fits-all solution.

Review your environment, your goals, and your business drivers before making any decision on changing your technology, because as many have discovered in the current environment, without the aid of modern technology your organization will cease to exist.

Before founding IAITAM, Barbara Rembiesa held key positions in both the financial and consulting sectors. Barbara has implemented and supervised asset tracking projects, discovery tool implementations and has been brought in as an industry expert to consult major savings and loans, universities, manufacturers and high tech industries throughout the United States. Barbara has also, successfully represented corporations in negotiations with compliance agencies for software violations. Barbara has implemented and designed disaster recovery programs for professional software testing and storage facilities including, but not limited to, off-site storage facilities, and has helped over 200 companies before forming IAITAM and successfully implemented improved software and hardware acquisition programs.


Tags: Cloud, licensing, IAITAM, ITAM,

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