Making the business case for cloud adoption (and Google Cloud)
An important decision-making tool for companies considering cloud adoption is the Return on Investment (ROI) calculation, which can be obtained as follows:
Let's take a look at this calculation in more detail:
- The gain from investment is the net positive cost savings obtained by migrating on-premises infrastructure to the cloud. This can be estimated by obtaining a quote (for instance, from the Google Cloud Pricing Calculator) and subtracting it from the Total Cost of Ownership (TCO) of the on-premises data center. This includes capital costs of equipment, labor costs, and other maintenance and operational costs, such as software license fees.
- The initial investment is the sum of costs involved in the migration project itself. This involves primarily labor and training costs.
A positive ROI will help you make a stronger case for the business value of cloud adoption to the executives in the organization you're working with. A cloud solution architect will often be involved in this financial exercise.
It is also useful (and even more important) to identify, as a cloud architect, the main motivations and business drivers behind a cloud adoption project beyond cost savings, as this knowledge will help shape the solution's design. Each organization is unique and has different needs, but some of the most common motivations for enterprises are as follows:
- You can avoid large capital expenditures and infrastructure maintenance in order to focus on application development.
- You can reduce technical complexity and integrate complex IT portfolios.
- You can optimize and increase the productivity of internal operations.
- You can improve the reliability and stability of online applications.
- You can increase business agility and innovation with self-service environments.
- You can scale to meet market demands.
Once you have identified these motivations, the next thing you must do is align those motivations with your expected business outcomes. These are observable and measurable results, such as increased profitability, improved customer satisfaction, improved team productivity, and so on. For each business outcome, success metrics should be defined that describe how such benefits are going to be measured. The ROI we discussed earlier is one example of such a metric, but there could be several others that measure, in some way or another, the degree of success of the cloud adoption (which, of course, depends on the organization's own definition of success). The following diagram shows an example of a motivation + outcome + metric triad:
Figure 1.2 – Sample motivation, outcome, and metric triad as a cloud adoption strategy
This exercise is not just something to wind up on a slide presentation at a meeting room full of executives during a boring Tuesday afternoon. It should be taken seriously and become an integral part of the organization's overall strategy. In fact, in a recent Unisys' Cloud Success Barometer report (https://www.unisys.com/cloudbarometer), it has been shown that, globally, one in three cloud migrations fail because the cloud is not part of the business' core strategy. On the other hand, organizations that make the cloud a part of a broader business transformation strategy are substantially more likely to succeed. Let that sink in.
Establishing a cloud adoption business strategy is outside the scope of this book, but Google's Cloud Adoption Framework (https://cloud.google.com/adoption-framework) was developed to provide a streamlined framework to guide organizations throughout their cloud adoption efforts. It is freely available online and is based on four themes (Learn, Lead, Scale, and Secure) and three phases that reflect the organization's maturity level (Tactical, Strategic, and Transformational).
Deciding whether or not to migrate to the public cloud may not be a very difficult decision to make. We are well past the phase of early adoption and uncertainty, and the public cloud model is now very mature and well into its adulthood. A perhaps more difficult question, however, is: why Google Cloud?
You've learned about the economics of cloud computing and how to make the business case for cloud adoption. Now, let's see where Google fits into the picture and the reasons you can present to organizations as to why they should choose Google Cloud.