Last week I sat next to Jerry, a buttoned-down businessman on a long haul flight to San Francisco. Jerry and I got into a casual conversation on technology, as he had just finished reading an article espousing the magical benefits of the cloud. Jerry was impatient with his IT department’s slowness, and was ready to push his team to implement a new SaaS application, believing it would be a magic bullet that would propel his business to new heights. I acknowledged that this was a great idea and then quietly asked him if he understood what it would cost to move to the cloud.
“Cost?” Jerry admonished…..”what do you mean, isn’t the cloud much cheaper and faster?”
This response was what convinced me to blog about the importance of fully understanding the costs of moving to the cloud. According to Joe Weinman’s book, Cloudonomics: The Business Value of Cloud Computing, “The standard argument for the cloud is that large providers achieve large economies of scale, and thus will be cheaper than a ‘do-it-yourself’ approach to IT”. And while you may not have to decipher Weinman’s 392 page tome to understand the cloud’s impact on your business, you will have to do your homework and answer a number of hard questions.
You’ll need to start with a high level “qualitative” analysis of your application portfolio to determine the best candidates for migrations. This need not be a detailed approach (yet), but should rather be a broad brush analysis to understand where the heavy hitters are. If you are interested there are a myriad of consultancies and proclaimed gurus who can help with this exercise, many at significant cost.
You’ll also need to solicit the advice of your business brethren…..after all, it is their revenues and profits that keep IT running. In many cases, the business will want to aggressively rush into a new application to replace that pile of legacy junk that burns IT’s midnight oil (and budget). You might be surprised how many businesses actually embark on this journey without IT, so better to proactively invite this conversation than find out about the initiative at the water cooler…believe me it happens! As Weinman points out, “the really interesting use cases for cloud are strategic, even existential.” This is a fancy-pants way of saying that justifications driven by the business are usually the ones that count the most.
When I ran the Architecture Team at a large healthcare company it was obvious that the enrollment process was significantly impacting the company from a labor and customer satisfaction perspective. Being new to my position at the time, I was shocked to find out the business was deeply engaged in conversations with cloud vendors offering a myriad of SaaS benefit applications without IT. It didn’t take long to get engaged…lesson learned.
Once you have your target candidates, you’ll need to do a detailed, honest assessment of your current infrastructure costs, followed by a design of your target application in the cloud, your migration costs (to include re-architecture and porting costs) followed by a future state cost analysis, including whether a pay for usage model can benefit your organization. Only then will you be armed with the knowledge to make an objective, fact-based comparison between your current environment and a cloud solution, and a recommendation that will set expectations and honestly assess whether the journey is worth the reward.