Saving money with cloud: it's all a question of metrics
Going cloud should save money but customers need to have some fundamentals in place first
Does cloud always save money?
That was the question I asked at the roundtable discussing the launch of Rackspace's research examining the economic impact of the cloud. I raised the question because the report of the research’s findings had the arresting phrase that cloud “demonstrably was cheaper”, something I know not to be true as I’ve talked about the issue with several cloud customers who ended up paying more.
It turns out the research was pre-selected and considered only cloud users who were happy with their choice. Manchester Business School’s Brian Nicholson says that he would like to have examined companies who had gone to cloud and changed their minds (the business school didn’t conduct the research itself, only analysed the results) as this would have added some fresh insight.
Interestingly, it was Rackspace’s Nigel Beighton who supported the idea that some customers could lose money opting for cloud. As a provider, it might be thought that Rackspace would be all for the idea that everything was rosy in the cloud world and all that a customer had to do was sign on the dotted line and money would come raining in but Beighton points out that customers have to plan cloud deployment more carefully as it could be more expensive if not. “People do need to be aware of what they're spending and they need a mechanism to measure what they’re saving,” he points out.
His view was supported by Jonathan Cremins CEO of Signage Live, a company that is run 100 percent in the cloud. However, he admits to be a second-time round Salesforce user as the company’s first stab at adopting the product didn’t go too well.
By stating so boldly that going “demonstrably” saves money, Rackspace has left itself a hostage to fortune. There’s always going to the case that someone loses out and ends up forking out more – a company can have a 1,000 customers, 999 of them happy ones and it will often be the unhappy one who’s the most vocal.
Nigel Beighton’s point is a valid one. Companies need to have better measurement of what they’re spending; they need to have more accurate figures on IT performance and staff effectiveness. It’s only then that they can start to gauge how important cloud can be for their business – without accurate metrics , companies have no guide to performance.
The last thing the nascent cloud industry wants is unhappy customers bellyaching that they’re losing money. In virtually all cases, opting for cloud will lead to a cost saving but it must be planned and implemented effectively. That way businesses will truly benefit.