In the right Cloud environment, IT performance goes up while IT costs go down.

Here’s how IT performance goes up:

1. Applications are hosted on centralized virtual servers in a data center, so …
   • Each department or end-user no longer needs their own copy of the app,
   • There’s just one version of the app, designed to be sufficiently flexible and customizable so all can use it on a variety of devices, and
   • Services are easily scalable, more secure, and more reliable.
2. Applications can be quickly and automatically provided on demand wherever they’re needed, so …
   • IT resources are optimized,
   • The entire IT environment is more responsive and flexible without adding work or cost, and
   • Access to resources improves without new implementation/deployment risks.
3. And end-users and their departments — as well as trusted partners — can be networked far more cost-effectively, regardless of location, via a standardized platform that enables integration and process automation between internal departments and partners.

And here’s how IT costs go down:

1. Squeezed, unstable CapEx becomes predictable OpEx. When hosted Cloud services replace on-premise IT operations, the expense shifts from the capital budget to the operating budget.
2. Just as importantly, those OpEx costs are highly predictable, since Cloud service-level agreements include performance guarantees.
3. Cost savings are achieved by pooling/sharing IT resources.
4. You pay only for what you use.
5. Your total cost of ownership (TCO) plunges.
6. Return on investment (ROI) and time-to-value accelerate.

Done effectively, Cloud Computing also improves security and compliance. I’ll get into that in my next entry.