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Mathematical and Computer Modelling
journal homepage: www.elsevier.com/locate/mcm
Identification of a company’s suitability for the adoption of cloud computing and modelling its corresponding Return on Investment Subhas Chandra Misra ∗ , Arka Mondal 1
Department of Industrial and Management Engineering, Indian Institute of Technology, Kanpur, India
Internet has become pervasive in our daily life and cloud computing is the newest offering as service over the ubiquitous Web. Cloud computing has been considered as a much hyped phenomenon in the IT and business world promising to deliver a host of benefits. Companies need to look beyond this hype and seriously consider the real value of incorporating the Cloud in their own businesses. This paper is aimed at helping companies analyze several characteristics of their own business as well as pre-existing IT resources to identify their favorability in the migration to the Cloud Architecture. A general Return on Investment (ROI) model has also been developed here taking into consideration various intangible impacts of Cloud Computing, apart from the cost. The analysis presented herein provides a much broader perspective and insight into Cloud Computing to its prospective adopters. © 2010 Elsevier Ltd. All rights reserved.
Article history: Received 1 November 2009 Received in revised form 15 March 2010 Accepted 16 March 2010 Keywords: Cloud computing Return on Investment (ROI) Benefits of cloud computing Cost of cloud computing
1. Introduction Cloud computing (CC)  is a paradigm shift in computing with the potential of changing the whole perspective with which we look at computing today. Currently, desktops, laptops and numerous such devices have penetrated into our daily lives and have become indispensable . It will not be too long from now that all we will need to know is that there is one huge computer at a remote location (without even knowing where it is) which has the potential to provide all the computational power and resources that we ever really need. CC can be defined as collection disembodied services accessible from anywhere using any mobile device with an Internet connection, provided by a type of parallel and distributed system of virtualized computers that are interconnected and that can be dynamically provisioned and presented as one or more unified computing resources based on Service-Level Agreements (SLAs) established between the service provider and the user [3–5]. In this paper, we analyze some of the economic aspects of migration to cloud architecture. Specifically, we attempt to model ROI in using CC in organizations. Studies of the economic aspects, in general, and ROI, in particular, are important organizational considerations in the adoption of any new technology. In the context of Grid Computing [6,7], for example, works (e.g., [8–16]) relating to these aspects exist. As CC is an important technological trend, it is also important to study these economic aspects of CC. There are different cloud delivery models (e.g., [3,17,18]) based on pay-per-use models, viz., Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS). Software-as-a-Service (SaaS) may be described as a process by which different software applications are provided by the Application Service Provider (ASP) as a rental over the Internet leveraging cloud infrastructure. This eliminates the necessity for installing and running the application on the customer’s own computer. It also diminishes the tremendous load of software maintenance, ongoing operation and
Corresponding author. E-mail address: firstname.lastname@example.org (S.C. Misra).
1 Current Address: Motilal Nehru National Institute of Technology, Allahabad, Uttar Pradesh, India. 0895-7177/$ – see front matter © 2010 Elsevier Ltd. All rights...