1. Cloud is not about just cost savings. I remember when ASP sales guys would get asked by a customer about ROI. And as the ambitious marketer enabling them, I’d quickly assemble a tool kit of datasheets with financial illustrations, business savings solution write-ups, brand-name analyst TCO whitepapers and detailed spreadsheets with 3-year cost savings analysis. The industry has now moved on to slick web and flash-based ROI tools that do everything but the direct withdrawal from the prospect’s bank account.
But what we learned was that starting with ROI was the kiss of death. If the customer only cared about cost savings then they’d never buy. It would be too easy for the tech guy to raise the specter of technical bogeymen that would always trump the potential savings. There needs to be a perceived risk-adjusted net benefit of going out-of-house.
2. Cloud service levels will typically be better than you can deliver yourself. Gartner traditionally put typical IT availability at 98% to 99.5%. 3-9’s of availability or better was reserved for ‘high availability’ applications. These were typically the most business-critical that got the clustering software, gold-tier storage, etc. If they say the Sidekicks were out for 4 ½ hours or so, and if this is the only outage they experienced all year, then this is still a respectable 99.95% uptime. Not bad for a service that appears to be based on IM-ing about concerts and adolescent hookups. I'm seeing many service providers building out with top-quality hardware, software and expertise that can only be afforded due to their large scale.
Going to the cloud has to be for more that just cost savings: It’s for avoiding the investment for infrastructure you don’t want to buy. It’s for getting services you wouldn't otherwise want to manage. And it’s for realizing SLAs, uptime, security, etc. that are typically tough to deliver yourself.
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