V3 Cloud Summit: Cloud needs new metrics for assessing ROI

Moving to the cloud is not the Holy Grail but for those considering such a move, greater IT agility and freeing up of resources to focus on innovation are benefits that should make the case for adoption, according to Bert Van Rij, IT strategist at HP.

Van Rij expressed surprise that cutting costs was the primary motivation for many potential customers

"In reality, one of the biggest things you find is that it flips operational expenditure and capital expenditure consideration in large companies," he said.

But the flexibility offered by the cloud is the major selling point, according to Van Rij.

"By getting into cloud, you can make IT resources available almost instantly. Things become more dynamic, and if you explain that, then business starts to understand the 'goodness' of cloud computing more and more, and get more interested," he explained.

However, among the reasons holding back companies are fears about security and compliance, plus confusion over just how to quantify return on investment from the cloud.

Charles Baird, Head of IT for the London Theatre Company and a cloud service user, said that organisations have to consider what applications and services can realistically be moved to the cloud and what needs to be kept on-premise.

Highly sensitive information is probably best kept in-house, he said, while data that is private but not necessarily business critical is less of an issue.

"I'm quite happy with the amount of security in the cloud for low-risk apps like our email. But I would never put our credit card processing in the cloud," he said.

Meanwhile, the safety of data in the cloud was raised as an issue, particularly that held by US-based cloud operators given the Patriot Act allows the US government to retrieve data without having to give notification.

"Lots of firms, Swiss banks in particular, are avoiding the cloud for that reason," said Van Rij. However, he maintained that security issues such as these will be ironed out over time.

Finally, there is the problem of how to measure return on investment, when cloud is such a different model from conventional IT procurement.

"With cloud, there is a different way of calculating ROI. You don't own an investment, so the classical way of looking at IT doesn't work," said Van Rij

Instead, companies need to look carefully at how they assess and measure the success of IT delivery, in order to undertake a proper assessment that will understand and track the benefits of cloud.

"The business case models are there," he added. "But companies need to measure infrastructure performance and see what they would save on those costs if they go to cloud, because cloud is not a classical investment model but based on cost per service."