Why deploy business in the cloud? What part and form of the business? and How? Business investment assumes that the answers will line up to allow a return. Lack of alignment will certainly dis-allow it.

1. Cloud IT and Business ROI
An Archestra notebook.
© 2013 Malcolm Ryder / archestra research

2. How it Counts
The “return” on business investment in The Cloud is
the quality of capability that the business sustains by
running in an environment of cloud-based facilities.
The purpose of the investment is to obtain a
strategically superior position with minimal collateral
damage. Obtaining the position can mean living there
or just visiting; it can mean starting new things there
or migrating old things to it.
© 2013 Malcolm Ryder / archestra research
It is a matter of ecological compatibility, where the
business at minimum avoids disadvantageous
restraints on speed and effectiveness that other
environments would impose; thereby it obtains the
advantage of higher probability of realizing potential
benefits from its efforts.

3. We already know this, but…
• Cloud computing grows on the other side of a complete break from the
past of business IT. The logic of investing in it is as distinct from distributed
enterprise IT computing as distributed was from the mainframe.
• The spend on the cloud IT approach, in every aspect of its runtime reality,
goes mainly to new things rather than to continuing the IT evolution of the
past.
• But the business understanding of how to spend on it is hardly unfamiliar.
We can trace the logic between the investment and the returns along paths
of familiar commitments and concerns. The following sketches are not
about facts and figures. They are pictures of a line of business thought.

4. Deploy Business In The Cloud
The “decision space” of
business deployment
planning is fourdimensional. The first three
– why, what and how –
synchronize at a fourth
point: when. Synchronicity
requires co-operative
management. Managers
must justify their joint
decisions to deploy at point
(x, y, z)…
x
WHY:
Portfolio
z
y
WHAT: Lifecycle
A Multi-Dimensional Problem

5. A Portfolio Decision
Cloud IT does not “translate” or “evolve” enterprise IT. Instead, it is an
alternative. The question is, for one dollar spent on enterprise versus one
dollar spent on cloud, which dollar is better spent? In general comparison,
does the difference look like this? If yes, then when, and on what, should
re-allocation start?
4
returned
returned
4
3
2
3
2
1
1
1
2
3
4
1
invested
Enterprise IT Business Environment
2
3
invested
$$$
Cloud IT Business Environment
4

6. Where Business Attention is Focused: Cloud IT covers these areas differently from before
Business
Benefit
Opportunity
Capture
Enhanced
Features
Infrastructure
Administration
1. Easy
2. Fast
3. Cheap
1. Cheap
2. Safe
3. Fast
Business Need
Transformation
Adaptation
Support
Expansion
Business Value
Criterion
Required
Aligned
Deliverable
Available
DESIGN
DEVELOP
CONTROL
IMPLEMENT
1. Safe
2. Fast
3. Cheap
DISTRIBUTE
MAINTAIN
© 2013 Malcolm Ryder / archestra research
“Greenlight”
Priority Points
Current IT
Cost Drivers
1. Easy
2. Cheap
3. Safe
Risks of Scale

7. Where Business Spend is Focused: Cloud IT lowers cost and raises dollar effectiveness
Business
Benefit
Opportunity
Capture
Enhanced
Features
“Greenlight”
Priority Points
1. Easy
2. Fast
3. Cheap
1. Cheap
2. Safe
3. Fast
Enterprise
distributed IT
challenges
that are
distinctively
and inherently
lesser in
cloud IT.
Future business
presumes an ability
to successfully take
on new areas and
arrangements of
pursuit. Success is
made vs. time-toreadiness and sunk
cost (premiums,
options, penalties,
legacies)
The expense of assets
and changes increases
as conventional
enhancement
methods drive up
complexity in order to
meet requirements
Infrastructure
Administration
1. Easy
2. Cheap
3. Safe
Operational maintenance
of site infrastructure
struggles with carrying the
burden of non-business
expertise and with
economy of scope
Risks of Scale
1. Safe
2. Fast
3. Cheap
Inefficient capacity
plus expensive
problem management
(expertise and
automation) constrain
and compromise the
financial balance of
supply and demand

8. Cloud IT characteristics exploited by the Business
Dollars spent on the cloud leverage
benefits and drive advantages via…
R&D COSTS
Shared investment by vendors and VCs
Vetted systems integration
Continuous testing
RELIEF FROM ONSITE MAINTENANCE
Remote service management
UPGRADES of INFRASTRUCTURE
Simplicity and continuity in replacements
FUTURE DEVELOPMENT VELOCITY / TIME TO VALUE
Massive open development community
DEPLOYMENT EFFICIENCY
Synchronicity with demand
Cheap increase in Scale

9. Lifecycle Management Decision
RENOVATE Solution
Translate current app to
cloud and use it
RE-ENGINEER Solution
OR
Re-build app in the cloud
and use it
REPLACE Solution
OR
Shop for existing
cloud app and use it
“Initially, one might assume that migrating to the public cloud
scenario would not pose any upfront investment costs because
there are no hardware or software procurement costs. However,
there will be a need for program planning and technical support,
software engineering support for “porting” the applications over
to the new cloud environment, and testing support for the
transitioned applications during the migration to ensure the
system is working correctly in the new environment.”
– Booz Allen Hamilton, The Economics of Cloud Computing

10. Execution Decision
Model and validate the actual dominant control points (incumbents) versus
the preferred dominant control points (policy). As needed, close gaps.
Operator: control of use
Provider: control of quality
Supplier: control of assets
HYBRID CLOUD
PUBLIC CLOUD
Build new factory
Federate factories
Rent other factory
OPERATOR
Internal IT
COO
Business Unit
PROVIDER
Integrator
Business Unit
Service Manager
SUPPLIER
Vendor
Integrator
Service Provider
© 2013 Malcolm Ryder / archestra research
PRIVATE CLOUD

11. In short, Business POV on ROI
• Not how to use IT differently, but how to use different IT
• Not using cloud to improve enterprise IT, but using cloud IT to
improve business
• Not IT decisions about how to support the business, but business
decisions about how IT makes sense
• Not IT economics for the business, but business economics of IT
operations
• Not infrastructure as business assets, but IT as business resource