If you are a person who is responsible for your firms’ strategic technology choices, you may want to pay attention to the discussion over TCO and cloud services. Total Cost of Ownership is a metric that seeks to understand all the factors, human and otherwise, that go into owning and operating your technology.
Most managers are pretty level headed, and tend to ask really blunt, straight forward questions like “so what?” If the executive is ambitious, the first question may be “How can my firm operate at peak capacity?” This is an important question because it assumes that the technology is there to support mission critical business functions like customer experience. The second and third questions might be: “how much does it cost?” and, “will I have to have to learn how to work again?”
The next question might be “what’s my liability if my information security is breached”, which you can read about in other places. The question about capacity tends to trump the cost question, and here’s why. Your success, if you are in a dynamic industry, demands that you perform at a very high level. Accountants measure things like goodwill as a way to account for reputation and brand preference. If you are planning on maintaining your position as a leading firm, or on gaining a position as a leading firm, you understand completely the necessity for smooth operations and a superior customer experience. The fundamental goal of a manager who handles technology should be to improve the bottom line through streamlined process management and education. The technology needs to support your most important assets; your clients and your employees. The costs of not doing this are counted in lost market position and missed opportunities. For some businesses, even one missed opportunity can outweigh the cost of maintaining a technology system.
That being said, the cost question is a real one. Industry reports are floating around that claim to decode the costs of technology ownership. If you have time, I’m sure you will read many of them. The bottom line is that, yes, for many types of companies a cloud based solution can save money. It saves money and it works. This is why the momentum is shifting towards the cloud brokers.