The Truth About Cloud Economics: a brief intro to an HBR article

The truth is, companies adopting cloud computing often miss the risk and depth of change needed to take real advantage of what is on offer

Not that this is so different from pretty much everything I’ve seen in a thirty year information technology career: from back office apps to front office transformation and from IT services outsourcing to full blown BPO, it is almost always resistance to change (attributable too often to poor communications) that can, on review, be identified as a root cause of the failure!

HBR state:

But the truth is, companies adopting cloud computing often miss the risk and depth of change needed to embrace a cloud economics model as they embrace cloud services. It turns out that the financial model for cloud computing has far more nuances for both a company and its cloud services provider than many people understand up front.

So what is the financial model for cloud computing? Let’s start by saying it’s a combination of how people make money in the cloud and the risks associated with adopting new payment styles. Many people assume it’s all about moving to a “pay-as-you-go” (PAYG) model and while this is certainly a big piece of it, it also involves operating versus capital expenses, subscriptions to services, and customers paying for outcomes (not technology). The good news is that these models are already familiar to most businesses.

The rest of the original article can be seen here

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Filed under Cloud, IT Service Management, IT Services, MSP, Outsourcing, Sales and Marketing, tech bits

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