In a recent conversation with a CIO the obvious question of the peer se competitive advantage in the adaptation of the cloud was raised. As aboarded earlier the adaptation of the cloud (external cloud defined as owned/ leased (SAAS) applications, bundled in to services with an underlying architecture, that run on a server provided by an external provider that run outside the firewall) are either driven by cost effectiveness (cost) or the need to set up services rapidly (demand) and cost effectively that can then run on the external cloud or be brought inside the firewall to an internal cloud.
The competitive advantage of the external cloud lays above all with 1) the corporate teams ability to negotiate effective contracts (volume, peak, exit) where total cost of ownership (TCO) should be clearly visible with the possibility to renegotiate contracts as prices fall over time, 2) the IT departments ability to provide effective IT services to their internal clients.
In order to back up the investment we need to provide a business case with TCO of the current run as well as future build and run. This would also be valid for outsourcing and shared service centre initiatives.
If the decision to move to the external cloud is not backed by a clear business case (BC) with TCO for the existing run future cloud solution that would include cost of exit you might want to ask a few more questions before you move ahead.
