Fine-tune your cloud-first strategy with better metrics- Valutrics

Analysts said there are no standard formulas or equations to be had when doing this cloud analysis work, and they noted that putting firm numbers around the various risks and benefits to consider is difficult, at best. The complexities of developing effective cloud metrics is  compounded by the fact that many IT shops don’t know the actual cost to run an application on premises — thereby making it hard to do a true cost comparison.

Still, there are some areas that organizations can consider when refining a cloud-first strategy:

1. Flexibility and agility

Mindy Cancila

Cloud proponents cite the flexibility to scale up and down with demand changes as a key cloud computing benefit. That’s true, but advisors said that’s only a benefit if the business has a need for that flexibility. Austin cited the case of a specialty company that does 40% of its annual business during the six-week Christmas period. Buying the year-round capacity would be prohibitive, yet being unable to handle that seasonal spike in volume would be devastating to the company’s bottom line, so the metrics clearly tip the scale to cloud. However, others said the cloud metrics for a steady-state application without any spikes doesn’t necessarily make cloud the better option.

Flexibility and agility aren’t only about scaling up and down with demand. As Gartner research vice president Mindy Cancila pointed out, cloud usually allows businesses to seize on emerging opportunities, such as expanding into new regions more quickly, as well as shortening development cycles to launch new functions and services faster. She said it’s hard to quantify agility, but its value needs to be considered when refining a cloud-first policy.

2. Regulatory and security risks

Risk takes multiple forms, with certain organizations facing specific risks that don’t apply to others. So, IT leaders need to determine which potential problems could impact their business and determine how to factor them into their cloud strategy.

Consider, Spivey said, regulatory risks. For instance, the risk of using a cloud provider that can’t meet strict European Union regulations regarding data — and the potential fines levied for violations — is one cost. On the other hand, an environment that doesn’t meet business needs also creates risks — say, perhaps, from employees using a consumer-grade file-sharing service to access and share documents containing sensitive data. A cloud option there could eliminate costly risk exposure, he said.

Cancila said she advocates for business leaders to create risk assessments that can be used to rate, or grade, applications, on their risk profile. “That helps them identify those applications that carry the least amount of risk for the organization to move to a public multi-tenant environment.”

3. Business impact

Like risk, there are multiple calculations that could come into play here.

What if, for instance, the internet is out and your manufacturing plant can’t operate because it doesn’t have access to a cloud-based critical app, Austin asked. What are the costs associated with that downtime — and do they exceed the value of the benefits that cloud computing provides?

Or, consider the business impact of applications that might not move as fast as needed in some cloud environments; that could slow productivity, which has a real and potentially significant financial impact to the business, he said.

“The speed of the internet is a limiting factor compared to having everything in a local data center. With a lot of ERPs and accounting and niche systems, it never occurred to anyone that the users and servers wouldn’t be in the same place and without good connectivity. And when you take those to the cloud, you can only move things so fast,” Austin said. That issue can be overcome by rewriting applications and creating APIs, he added, but that, too, is another cost to factor into a cloud-first policy.

On the flip side, experts asked, what are the costs of not having capacity to react to new business opportunities that the elasticity of the cloud provides? Would that cost be greater — or less than — the costs associated with the scenarios listed above?

Similarly, what’s the value of being able to support incubator projects or new marketing initiatives quickly because IT no longer needs weeks — or months — to stand up servers in its own data center? “The notion of being able to fail fast has a business advantage,” Austin added.