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A Better Metric for Analyzing the Value of the Cloud – SaaSBuzz.com
19 Nov
2009
A Better Metric for Analyzing the Value of the Cloud
While you may be reading and hearing about positive financial and the economic analyses regarding the benefits of Cloud computing, those analyses are based on unrealistic total cost of ownership (TCO), return on investment (ROI) and misinterpreted CapEx/OpEx calculations. Indeed, these calculations are missing a complete understanding for the value of the Cloud in the IT service delivery equation, which is why comparing Cloud computing alternatives requires a modern metric that fully understands the service delivery model.
In my opinion, no two metrics were more injurious to the IT field than TCO and ROI. I have yet to meet one senior executive with budgetary responsibility that has accurately tied investment in IT back to a sizable gain or to represent a true TCO. Let’s face it; these are notional concepts at best that were devised to be manipulated to provide IT executives with justifications for funding projects of questionable value to the business.