4 steps to calculate your cloud ROI

May 25th, 2018

Intech Systems

Cloud computing

We all know that cloud saves money. Saving money means doing away with physical infrastructure and freeing up some resources like time and efforts. So, the resources which were formerly dedicated to maintaining the servers can now be allocated to more important activities like R&D. Cloud computing is a technological shift by combining many new and existing technologies. But this shift will be beneficial for your company only if you calculate your cloud ROI.
ROI (Return on Investment) is considered the standard of measuring financial success in business. You can examine the benefits cloud computing offers to your business and show the potential return it can provide from the beginning. Here are the steps to follow to calculate your cloud ROI:

Know Your Data Center Costs

To measure your cloud ROI, you need to know what is the total cost of ownership (TCO) for on-premise data center. This way, you can compare and get clear idea of what you will gain by moving to cloud. The most important points to keep in mind while calculating the on-premises ROI are the cost of the equipment, the cost of capital and the projected lifespan of the equipment. Add to this the estimated operating costs like floor space, salaries of IT staff, electricity, etc. over the projected lifespan.

Know the value of cloud

Whatever you buy, you first look at what you’re getting in return, its benefits and value. Likewise, while evaluating your cloud ROI, consider its benefits over the physical data center. Flexibility is a one of the most fascinating benefit of the cloud. You can scale up or down as per your business needs. This is not possible easily with on-premise data center. The cloud also comes with the pay-as-you-go model. So, be sure to pay only for what and how much you use. The time and cost savings of cloud computing is also much more as compared to the physical servers.

Know the cost of Migration

After considering the benefits and value the cloud platform provides, bear in mind the cost of migrating to cloud. Instead of annual expense, you’ll pay the monthly charges for whatever you use. Time and money goes into moving your applications to cloud. So, make sure you choose the optimal way to do so. Add to these the training and other costs for getting cloud-ready.

Determine the cloud ROI

Determining the cloud ROI becomes easy after knowing all the above points. The next steps would be to compare costs of various cloud vendors, keep track of the usage, lessen the variances and achieve the balance between performance and costs.
Migrating to cloud is an excellent opportunity to come out of the obsolete IT methods, bulky servers and other constraints. Be sure to make the decision after considering all the points important for your business so that you can get the best out of cloud.
You can also get in touch with us to know more about cloud computing in business.