Calculating the ROI on Cloud - Part 2

Calculating the ROI on Cloud – Part 2

Productivity Enhancement

Productivity enhancements are more subjective in nature than direct cost savings; they are dependent on the type of business and the current organizational set up.

Application Development

The notion of Platform as a Service (PaaS) is to extract the common set of services as a platform and enable the cloud developer to become more productive and agile. The set of services provided by the platform can be categorized as

Middleware – Identity, authentication, worlflow, mashup
Computation – logic execution, messaging, transactions
Data Layer – Relational data, large data

Our experience indicates that 25-50% less effort is required if the application were to be developed using one of the available PaaS platforms. This assumes that the UI required from an enterprise point of view is fairly standardized, and the relevant tools for data modeling are used from the PaaS toolkit.

Maintenance

In a legacy scenario, there are several applications that need to scale over time, however they have an inherent overhead of having to rewrite the whole code base in order to do so. The other alternative is to make use of additional infrastructure; however this is not cost effective. There are tools that work with the existing code base and make use of caching, protocol tuning and dynamic routing. There are several categories of previous generation or legacy applications that are maintained as part of the overall enterprise application portfolio:

Mainframe
Oracle Forms
Lotus Notes
Power Builder
VB Access
Delphi
COBOL

While the maintenance costs on the legacy setup increases with time, it is possible to modernize these sets of applications towards a more standard PaaS set of applications. This can reduce the maintenance and time/ labor costs because of normalization of the setup post migration.

Infrastructure

Standard stacks imply that one can optimize deployment and ongoing administration of resources. For example, if the stack is in Open Source, then utilities from companies such as Groundworks Open Source could help. Often, web applications follow a standard pattern in terms of deployment. If these can be standardized, standard admin utility scripts and automation would provide benefits.

Revenue Transformation

Revenue transformation is the third and potentially largest benefit of moving to the cloud. Revenue transformation can be achieved in two ways:

Savings from cost reduction and productivity enhancement yield can be reinvested into revenue generating activities
Cloud infrastructure itself allows generation of additional revenue at a lower cost

Data Sharing

Application siloes can trap important business data and make it inaccessible without the application shell. Protocols like OData allow for key information to be shared with associated contextual metadata. Implementing support for such data sharing mechanisms will allow applications to integrate more elegantly without the additional cost of legacy approaches of ETL and data integration. PaaS based messaging can enable this seamlessly.

Mobility

With mobile becoming the main channel of interaction with the end users, availability of a mobile interface is extremely crucial to expanding revenue opportunities. Leveraging a PaaS based mobile enablement framework that can:

Create a cross mobile platform application without additional recoding per device category
Increase user productivity in operations support, sales, etc.
Utilize data sharing mechanisms above to enable key data to reach the end mile on mobile side

Social Enterprise

Enterprises need to manage interactions with their customers as well as be aware of how their customers are interacting with one another.

Leveraging PaaS extentions allows applications that enable the social enterprise to be built easily. Increased collaboration amongst the enterprise can have a 30-40% productivity benefit. Integrating social networking can cut down on customer feedback cycle by approximately 40%.

Capability Store

Instead of an Application Store, the Capability Store provides several enterprise capabilities and services that are candidates to be shared in the context of partner or community ecosystem. The ready existence of PaaS and enterprise cloud allows sharing in a flexible manner thereby enabling a completely new revenue stream for enterprises.

Continued…

Part 3 on Friday

Article By Shreekanth Joshi

Associate Vice President, Practice Head for SaaS and Cloud /Persistent Systems