What’s The Return On Developing In The Cloud?

Emily Mui

Cloud integration has come and gone; the cloud now fully envelops modern business. However, gauging a return on investment (ROI) for the cloud is difficult and oftentimes too subjective, leaving many businesses in the dark about whether they spent their time, money, and energies wisely … or if they should even consider using the cloud to run their applications. Luckily, we can shine a light on cloud ROI once and provide some guidance based on what we’ve seen with our customers.

Understand the impact of the cloud on your corporation

According to a report by RightScale, 93% of businesses use the cloud in some form. It’s safe to say cloud computing is a mainstay. But after the initial struggle of cloud adoption, many businesses’ tangible ROIs fell short of expectations. From IT teams that lacked knowledge about the right Web application program interfaces to using cloud technology for more than critical functions, companies stretched the cloud to its limits – and then found they couldn’t gauge accurate returns.

Simple cloud ROI calculators in hardware or software form will provide inaccurate results. Take the time to measure utilization among your servers, look at network consumption, and adjust your efforts accordingly. Elasticity in the cloud allows you to resize cloud instances to meet your disk usage measurements.

Platform as a Service (PaaS) is seen in the industry as a cloud computing service model that helps organizations create and test apps without changing existing architectural landscapes. Many businesses just beginning to understand the value PaaS delivers are trying to calculate how PaaS helps business growth. But there’s no set formula to calculate cloud ROIs; each corporation must analyze the benefits and determine the value for itself based on its business goals – whether for today or for three years from now. However, this doesn’t mean there aren’t tools out there today to make specific calculations possible.

Measure your cloud ROI accurately

To measure cloud ROI with any degree of accuracy, you must look at the change in your technical infrastructure from different standpoints – both tangible and non-tangible. Consider the financial returns that are clearly tangible: better use of resources with fewer FTEs for manual tasks, greater scalability, etc. Non-tangible return factors would consist of speed, reliability, user friendliness, and risk management. Computing cloud ROI requires a holistic view of your infrastructure and an assessment of how it transforms your enterprise as a whole.

Look at your corporation’s cloud computing goals and benefits differently from other technology adoptions. Factor in the value of the cloud’s competitive advantage, which most would agree is agility. Agility is a benefit that is relative to each business and is a reason why companies opt to use a PaaS solution. There are others. IT managers need to step back from cloud computing systems to analyze and assign value to several individual points. These include:

  • Speed of development and increased productivity: A main draw for integrating the cloud is to streamline and enhance employee productivity, so it’s important to assess boosts in organizational speed and agility. 
  • Streamlined costs and increased profits: Measuring expenditures is the only way to find your ROI. Look at the actual costs of cloud migration in dollar amounts, as well as the opportunity costs, then see where your company can trim the fat. 
  • Improvements in customer service: The cloud gives businesses the ability to respond better and faster to customer problems, making it easy to expand customer reach and build retention. 
  • Additional opportunities for innovation and growth: The cloud provides scalability to meet corporate needs, as well as the increased ability to create and test new ideas and solutions. 

Each of these benefits comes with an ROI measure. Assign an estimated dollar amount to each benefit, then consider other benefits that may result from cloud integration, such as headcount reductions and improvements in market intelligence. Think architecturally when calculating cloud ROI, and don’t forget that cloud benefits can multiply and compound – improving one area of business often enhances other areas.

If you’ve migrated to the cloud, your corporation can benefit from the SAP HANA Cloud Platform (HCP), which allows you to build and scale personalized user experiences, unlock knowledge about your cloud integration, drive Big Data analysis, and rapidly develop and test new applications. Try this tool to assess what HCP can do for you and your bottom line.


Emily Mui

About Emily Mui

Emily Mui is Sr. Director of HANA Cloud Platform (HCP) Product Marketing at SAP with 15+ years of product management and product marketing experience in cloud computing, business intelligence and analytics. In her current role, she develops high impact awareness content and programs to educate customers on the value of HCP for innovating new business applications. At BusinessObjects and SAP, she led several successful product suite launches, managed number user conferences including key topic areas for SAPPHIRE NOW as well as serve as the lead BI contact with ASUG. Emily was also the SAP lead for the SAP dashboarding solution including building up the user community. Her areas of expertise include analytics, big data and cloud computing. Emily holds a B.S. in managerial Economics from U.C. Davis and an M.S. in Industrial Administration (MBA) from Carnegie Mellon University.