Marketing hype claims that cloud computing can help any enterprise meet most IT service needs at a lower total cost of ownership (TCO) and higher return on investment (ROI).
However, the promise of the cloud requiring minimal capital investment and the subjectivity of some cloud benefits have created some confusion among IT professionals trying to determine the benefits of adopting cloud services.
Calculating ROI for cloud services requires some up-front work to understand business requirements, organizational, maturity, control considerations and regulatory requirements and to quantify benefits and costs associated with the cloud model that the enterprise has selected. Strategic benefits could be more subjective and may require additional analysis to measure their financial impact over the investment.
To determine whether the cloud is a viable option, it is necessary to separate the hype from reality. Calculating ROI does not need to be complex because it is only an estimate to support investment decisions; however, it must be accurate and based on realistic expectations.
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