Getting into cloud computing doesn't have to cost that much, and the return on investment can come quickly. But that ROI can fall short of expectations if hidden costs are left out of the equation.
That's one finding in a new white paper from global IT association ISACA, which takes a close look at the true costs of cloud migration and offers what the group says is a practical framework for calculating returns on migrating to the cloud.
The research outlines five hidden costs that enterprises may fail to anticipate when moving quickly to cloud-based services: cost of bringing services back in-house due to regulatory change (e.g., stricter data privacy laws); cost of implementing and operating countermeasures to mitigate risk; unexpected expenses involved in initial migration of systems; loss of internal IT knowledge providing competitive differentiation; and lock-in with specific cloud provider or proprietary service model, which may slow down future adoption of open standards-based services.
“According to the hype, cloud computing makes it easy to offer IT users the same self-service that people love when they turn on their lights or air-conditioning — it’s limitless, on-demand and pay as you go," said Marc Vael, CISA, CISM, CGEIT, CRISC, international vice president of ISACA. “But in reality, cloud computing is like every other IT innovation. Security, cost and complexity don’t disappear — they just need to be managed and accounted for."
To help more companies effectively calculate the ROI for their cloud initiatives, the “Calculating Cloud ROI" white paper offers tips, including the need to balance being accurate with the need to reach a decision; the fact that the cloud is not right for every organizational need; ROI is a good start, but other financial indicators should also be calculated; and it's far easier and less costly to change a decision when it's still on the drawing board.