Here’s an interesting point of view on the TCO on Cloud Technology from an article on CFO.com:
Q: I’m a finance officer, not a technologist. Can you guarantee that the total cost of ownership for the cloud is lower than what I’m already spending for my on-premises IT?
A: That depends upon what you’re already spending. Do you know?
According to Forrester senior analyst Dave Bartoletti, most companies are not all that good at knowing how much it really costs to run an application because IT departments “are still seen as cost centers.” The company buys the servers, the storage, and the applications, and flips the switch. “What does it cost to run?” Bartoletti asks rhetorically. “Who knows? You just depreciate the assets over a certain amount of time and after they’re fully depreciated, you buy more.” Even organizations that account for staff costs, maintenance, energy — all the indirect spend that goes into producing a service the business needs to run — will probably not be able to cost out individual applications with any degree of accuracy. How much, for example, does your e-mail cost? “If your CIO can’t tell you it’s x, y, z, per box,” Hotels and Resorts CIO Mike Blake tells CFO, “that’s a problem.”
“Enterprises are making significant investments in cloud technology in pursuit of lower costs,” says Dave Zabrowski, founder and CEO of Cloud Cruiser, a provider of cost analytics for cloud consumers, but “if you can’t see what you’re spending, there’s a good chance you’re spending too much.”
And that problem, that financial black box, has been the bane of the finance officer’s life in the IT age. The cloud, if nothing else, presents an opportunity to open that black box, although it doesn’t do so by itself.
To read the full article on FAQs for CFOs on Cloud Technology go to: http://www3.cfo.com/article/2012/7/the-cloud_cloud-faqs-for-cfos