Thursday, April 29, 2010

Open Group Publishes Guidelines on Cloud Computing ROI

In an important industry contribution, The Open Group has published a white paper on how to build and measure cloud computing return on investment (ROI). Produced by the Cloud Business Artifacts (CBA) project of The Open Group Cloud Computing Work Group, the document:

  • Introduces the main factors affecting ROI from Cloud Computing, and compares the business development of Cloud Computing with that of other innovative technologie;
  • Describes the main approaches to building ROI by taking advantage of the benefits that Cloud Computing provide; and
  • Describes approaches to measuring this ROI, absolutely and in comparison with traditional approaches to IT, by giving an overview of Cloud Key Performance Indicators (KPIs) and metrics

In presenting their model, business metrics were used to translate indicators of cloud computing capacity-utilization curves into direct and indirect business benefits. The metrics used include:

Speed of Cost Reduction;

Optimizing Ownership Use;

Rapid Provisioning;

Increase Margin;

Dynamic Usage; and

Risk and Compliance Improvement;

A description of the ROI model used is also provided.

A definite must read!

Available online at

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Anonymous said...

Wow, crucial find here Kevin. Their whitepaper has citations (which many information sources forego), and doesnt read like research. It is more on the business side and chock full of visualizations. I wish that the visualizations were described and labeled a little more accurately, and that the data in the diagrams was backed by some solid data. Despite, its a great read for convincing business execs, or convincing your wallet to invest money into these companies.

My Cloud and tech blog:

Anonymous said...

Yes, WOW. The numbers are flawed. They are based upon cpu clock cycles, but ignore the AMOUNT OF WORK PERFORMED PER CLOCK CYCLE. This is very misleading. Take Azure: $.12 per hour - for what amount of work? A celeron or nehalem? The fudge factor could 100-500% or more because of this. That blows away the marginal gains of the capacity utilization case.

Sorry, this ROI would not pass a good finance team.

Unknown said...

Nice Post...

Unknown said...

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