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June 19, 2014updated 22 Sep 2016 3:04pm

13 ways CIOs can explain cloud computing to CFOs

What exactly is cloud computing and how will it bring value to your company?

By Duncan Macrae

1. Mark Corley, CTO, Avanade UK

"Avanade defines cloud computing as enabling and delivering computing services – compute power, data storage, network bandwidth, and application software – over a network on an as-needed basis. It can deliver cost savings, ROI, new revenue streams and efficiencies.

At a FTSE 100 customer we reduced OPEX by 68% and delivered a payback of three months. This was done without introducing increased risk to the organisation and whilst introducing a potential new revenue stream for the customer.
Cloud can enable new business models, allow more focus on your core business, take advantage of economies of scale and mean the capacity you pay for closely follows the capacity you use."

2. Richard Garsthagen, director of Cloud Business Development, Oracle UK

"A cloud computing model allows businesses to achieve commercial and operational flexibility by making information technology readily available as a service.

At its core, this model involves implementing on-premise capabilities like self-service, shared and elastic platforms, or in the case of public cloud gaining access to services based on these capabilities.
Investing in cloud computing allows organizations to make the most of IT as a strategic asset and support innovation. With cloud, they can respond quickly to business needs, more easily deploy new services to drive growth, and lower the cost of running existing IT components."

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3. Mark Keepax, SVP UK & Ireland, ASG Software Solutions

"Cloud computing allows organisations to consume IT (software, platforms and infrastructure) as a business service via the Internet, rather than creating their own on premise IT environment. Users can at any time, simply log on to their own secure workspace, using any device they desire, from any location and immediately have access to the right software and tools, without having to install anything.

The Cloud makes the IT service truly elastic in consumption, mirroring organisations exact needs at any point in time and reflects this in price. It’s the unbeatable way to deliver IT."

4. CIO of The Outside View, Chris Bracegirdle

"Machine learning is all about feature extraction. When you are a baby, we have no knowledge, no experiences to draw upon and no way of distinguishing one thing from another. When a baby learns about what a girl is and what a boy is they find features that separate one from another, girls having long hair or other basic features.

"You feed the human brain and teach it through providing more examples to work from. The more examples the more granular the distinctions and differences become. So even if you have a boy with long hair, the human is able to identify as a boy because there are hundreds of other variables considered when making a decision. In the same way the computer learns by being taught to find differences through having millions of examples to work from."

 

5. Bob Welton, regional director Northern Europe, NTT Communications in Europe

"The smart CIO will work closely with their CFO to prove the financial argument for cloud computing. Ultimately, it comes down to the business case fitting the requirements of the organisation and understanding that moving to the cloud is not a slap dash job. However, once the business case has been accepted by the organisation’s executives, including the CFO, the move to cloud is a much more compelling proposition. They can put forward the view that legacy ICT estates can hinder wider business innovation, and by implementing cloud computing, it will support expansion into new markets and provide intelligent data to help business growth."

6. Matthew Morris, cloud specialist, Peer 1 Hosting

"Cloud Computing is where people and businesses get access to computer resources and applications in a similar way that you would get access to milk. You don’t have to buy the whole cow, you just buy milk in whatever size you need when you need it, and it comes in all sorts of readymade flavours."

7. Jay Migliaccio, director of cloud platforms and services at Aspera

"The cloud has evolved from being just a simple off-site storage, archiving and delivery system towards an encryption and transformation on demand service. Eventually we will see a move towards order processing. The recent reduction in cloud infrastructure prices is an exciting one for both cloud enthusiasts, and CFO’s. These reductions mean that as commodity infrastructure vendors are now competing in efficient markets, prices will continue to decline, so it’s a good situation for everyone."

 

8. Simon Aspinall, president of Virtustream’s Service Provider Business

"So, a CIO walks up to a CFO. We know how the conversation goes.

CFO: So, this cloud sounds great, but I need to plan my annual budget around it.

CIO: Well, we can estimate the cost for a small, medium or large package depending on the maximum possible demands of our IT systems. Does that give you enough?

This plays into the CFO’s safety zone, but surely we can make things easier and more efficient? Say we use a true consumption-based pricing model. Here’s how it goes.

CIO: Now I can show you exactly how much resource you are using throughout the year, from your highest peaks of use to the lowest troughs, eradicating the wasted unused space in standard cloud packages. And, seeing as we don’t operate at peak levels every day, now you’re NOT going to pay for that unused resource. You’ll have a precise assessment of how much you are spending as well as who’s spending it so you can cross-charge departments for their individual use.

Wouldn’t that be a better way?"

9. Dave Paulding, regional sales director UK and Middle East, Interactive Intelligent

"The top priority for any CFO has to be the financial security and viability of the business. They must work to ensure an organisation has the tools to make or save money, while at the same time invest wisely into new solutions. Moving to the cloud is a case in point, as it can offer significant cost savings and potential for new revenue streams, but there may also be the fear of the unknown.

A recent survey for Interactive Intelligence suggests that many are putting this fear aside and leaping into the cloud. It shows that nearly three-quarters of businesses operating a contact centre are looking to move to the cloud during 2013. So, with many of their competitors likely to be taking advantage of the benefits that the cloud can bring, what do CFOs need to consider if they wish to level the playing field?

When an organisation moves to a solution provided in the cloud, such as communications as a service, the first difference CFOs will notice is that expenditure for these services moves from being mainly CapEx to being mostly OpEx. No longer will the business need to buy in most of the hardware associated with communications over IP, such as servers, distribution boxes etc, instead the functions of these devices will be provided remotely.

The advantages of this are numerous, but probably the most important to a business today is flexibility. Using OpEx to purchase key functions requires less administration than CapEx, meaning decisions can be taken more quickly and services implemented more rapidly. This also provides business agility, allowing solutions to be increased or reduced overnight with little expense.
How much of the cloud solution is paid for through CapEx and OpEx depends on the type procured and how much of the IT infrastructure businesses want to transfer."

 

10. James Henigan, operations director at Outsourcery

"Cloud computing is a flexible and easily accessible way of consuming your IT services – a Cloud Services Provider (CSP) can host the applications your business needs for you, keeping your files backed-up in data centres, so you don’t have to manage them on-premises. Cloud is worth investing in from a financial standpoint because it’s cost-effective, as companies that choose to adopt the cloud can scale usage up or down depending on business needs at any given point in time. There is no huge capital expenditure needed, project budgets have minimal start-up costs, and you’re generally dealing with predictable monthly operational expenditure, contributing to a healthier balance sheet."

11. Paul Bamforth, country manager at Projectplace

"With the cloud, you only pay for what you consume. Using the cloud means that if you’re a retailer, for example, you don’t need to build an expensive infrastructure to ensure your website has the capacity to cope with the busy Christmas shopping period. By giving you the IT capacity you need elastically and on demand, the cloud makes your business more agile and enables quicker decision making in a competitive market. Through zero CAPEX, it saves you money by eliminating the need for costly on-promise hardware and software, or specialist engineers to manage them. It allows you to invest your resources on the core business instead of IT, freeing up funds for use in new ventures, R&D and talent to drive future growth."

 

12. Members of The Corporate IT Forum

"Cloud computing doesn’t involve any capital investment. You only pay for what you use on a ‘per minute’ or ‘per hour’ basis. It is great for start-ups, projects, bursts of demand (such as concert booking systems) and trying stuff out.
Cloud solutions can offer the business the same IT functionality and support as they get today, but with greater benefits. These include reduced total cost of ownership, reduced environmental impact (through carbon reduction) and greater productivity."
The member who provided this definition was keen to point out that realising such advantages depends to a certain extent on the organisation’s ability to measure and report on them."

13. Dennis van der Veeke, CIO at SDL

"It’s true what they say about the business case for cloud – key benefits include agility and scalability – but this usually isn’t the language that makes a CFO stand up and listen. You need to show what ‘agility’ and ‘scalability’ really mean for your company’s bottom line. It often means there are no fixed costs or there are monthly fees. There are even ‘pay as you go’ payment models which allow your business to scale up and down on cloud solutions dependent on business needs, like scaling up to meet peak seasonal online traffic for ecommerce sites. These flexible commercials increase return on investment and, in the longer term, help reduce CAPEX – words a CFO likes to hear.

Using cloud solutions that offer a trial period to demonstrate ‘proof of the concept’ really can lower financial risk for the CFO. In addition, implementing cloud technologies that have been thoroughly tested, certified and audited for safeguarding a company’s security policies is essential too. That’s the type of language that would help sell the benefits of cloud to your CFO."

 

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