IT Strategy and the Supply Chain
Perhaps this is a mad idea, but I see the decision on cloud like the decision on buying a coffee machine for the office. It is a basic management decision, pros versus cons, investment versus benefit, running cost versus opportunity. Lets use this as a simple example to see how cloud compares to coffee as a service (CaaS if you will).
The other week I was considering if we should get a machine for the office. Lets face it, with the sophistication of the machines available, you can easily invest a four figure sum in a great coffee maker to match the quality of the coffee from one of the big chains. Now add supplies for a year for the whole team. This includes not just the cost of great coffee, milk etc., but all those hidden extras like cups, filters; not forgetting extra work for the cleaner or one of the staff to clean it all; then potential service costs and spares…
Suddenly the obvious cheap solution – buy a machine and all enjoy great coffee on tap, starts to look expensive. Especially since, being a consultancy, we have a lot of staff working on client side; often we have no idea how many of us will be in the office on any given day, let alone guessing how we might grow in the next year, potentially increasing the numbers working in the office. So I began to wonder, could it actually be cheaper per cup to buy the coffee when we need it from one of the coffee shops just outside. Great coffee, no hassle. A quick total cost-of ownership calculation for us with projections and I had my answer.
Now, of course, we can consider the same rationale on the cloud for IT services. Substitute coffee machine for bank of servers and/or data centre service. Milk and coffee are the power, air conditioning, and other utilities. Cleaning and service are the systems administration for the operating environments, and so on. I am willing to place a bet that if you look at total cost of ownership for IT in most organisations on the same basis as I looked at my coffee machine dilemma, you will rapidly come to the same conclusions as I did. Doing it yourself is not worth the hassle, it is messier, more costly, and worse requires a big lump of cash up front. I am sure the same cost benefit analysis can be applied to your IT, and will show what the cloud could do for you. Maybe it is not the right answer right now for you, but at least you have to think about it, do the analysis and make a decision.
So now, I am just left wishing we could run a pipe to the coffee shop on the corner, in the same way that the cloud arrives down the wire to our office to be used any time, anywhere!