3 things to consider while calculating ROI on cloud

Varoon D. Rajani, Founder & President Cloud Computing at BlazeClan Technologies.

Cloud computing ROI is usually discussed in terms of capital expenditure (CapEX) v/s operational expenditure (OpEx). However, is it always right to calculate the ROI on just the CapEx v/s OpEx basis?

It is true that the ability to convert capital expenditure to operational expenditure and thereby reducing upfront investments in hardware and software is a major benefit of public cloud, but there is more to cloud then just simple Rupee/Dollar savings.

Here I put forward three aspects of cloud computing which should be considered while calculating ROI on cloud computing adoption.

Changes to the Application - Efforts and Costs

Cloud computing provides absolute advantage to enterprises looking to deploy web based, large scale applications, but these advantages are not applicable for the enterprise legacy applications.

Legacy applications were designed and developed keeping in mind hardware constraints prevalent at that time. Computing power was low, storage was expensive and network bandwidth was slow. Applications were optimized to run within these limitations.

Cloud computing overcomes all of these constraints and provides virtually infinite computing capabilities and cheap storage and bandwidth. These capabilities come with a possibility to architect the application to be infinitely scalable and fault-tolerant and making back up and DR processes easier.

Before you decide to migrate an application to cloud, you need to do proper due diligence to understand if the application needs to use the capabilities provided by cloud computing.

For example, if the application is to be used locally with a limited set of users you may not want to make any changes, but if the application is consumed by a global base of users in multiple time zones it is recommended to make changes to ensure fault-tolerance and high availability.

There might be some changes required to the basic design and architecture of the application to make use of Cloud's capabilities. These changes will require time and efforts to enable them for cloud migration. For applications where there are no such requirements, they can be directly fork-lifted from on-premise infrastructure to cloud without changes and low efforts.

Consider all the efforts and time required to make the changes and consider these factors as well while calculating your ROI for cloud.

SLAs and Downtimes

A lot of debate happens around SLAs on cloud computing, about availability and downtimes, but let us accept that downtimes are a fact of life and they happen all the time even on on-premise infrastructure.

Having 100 per cent of uptime for an on-premise setup will take a lot of investments and efforts for an enterprise, but with cloud 100 per cent availability can be achieved at much lower efforts by spreading the application footprint across multiple locations of cloud provider and with the right application design and architecture.

Operationally the expenses for on-premise and cloud infrastructure may come out to be the same, but the cloud has a clear advantage when it comes to managing the overheads. Overheads would include efforts spent on upgrading hardware infrastructure, ensuring physical and hardware infrastructure maintenance etc.

With Cloud adoption system architects and engineers could concentrate on delivering quality solutions rather than spending time on the odd heavy lifting jobs, and deliver value to the organization and justify their expertise and experience.

Value -End User Experience & Latency

Key to acceptance or success of any application depends on the end user experience delivered. There is nothing more annoying than to wait for an application to load on your browser.

Enterprises have teams spread over multiple locations and customers accessing applications from across the world, in such a scenario it is important to provide an application which is fast to load with low latencies. Depending on the end user spread across geographies, it is utmost important to have access to a global infrastructure to host you application and ensure low latencies.

With cloud you get access to such global infrastructure, taking the end point of your application server nearer to your end user. This could significantly improve the end user experience by reducing latencies.

Before selecting your cloud vendor you should check the presence of the provider's infrastructure locations, if your cloud provider doesn't have locations nearer to your end-user base, it might not be a good idea to select that particular vendor.