ROI for cloud IS possible but not for everyone, say CIOs

Windsor and Maidenhead council, Framestore and Greenpeace all see ROI from cloud, but Oxford Economics is not there yet

It is possible for there to be a return on investment (ROI) by adopting cloud services according several end users who were speaking at Computing's Data Centre & Infrastructure Summit 2014.

Rocco Labellarte, head of technology and change delivery at Royal Borough of Windsor and Maidenhead, explained that he had been enacting a cloud strategy at the borough for the past two years.

The borough has implemented a new cloud telephony system and is also using central government systems. The firm has also procured cloud services through the government's G-Cloud framework in a £200,000 investment.

This was necessary because the borough had an in-house system that had been in place for about seven to 10 years and was out of date, said Labellarte.

Labellarte believes it is possible to find a ROI in moving to a cloud environment.

"Just don't do a like for like comparison with a data centre because on capex and opex, the cloud is going to lose out," he said.

"Instead, we looked at several things such as storage and also the fact that it loses you the cost of people. In addition, you can use some of the same skills that you have in-house for proactive development," he added.

And Labellarte believes the borough's new model will stand it in good stead in two years' time.

"In two years we are going to be the first local authority to pull in a profit and that's because of the model we have in place," he claimed.

Andrew Hatton, CIO at Greenpeace, agreed with Labellarte that end users could get a return on investment by using the cloud.

"I think you have to think about the increase in capability that you're going to push into the organisation, that shouldn't be underestimated. If you're going to migrate to one of the larger public cloud services there is no way that anyone can match their investment and innovation and you can build that into your ROI to some extent. You can also include non-technology type benefits as well, such as efficiency gains and the environment as well," Hatton told delegates.

Steve MacPherson, CTO at Framestore, a creative studio whose work includes Gravity and Guardians of the Galaxy, says that both his film and advertising sides had differing types of returns on their investments.

"On the film side, if we had gone down the capex route it would have cost us £250,000, and we hit that for £30,000 and we also don't need to carry anything [technology] going forwards - even for these remarkable numbers it is a challenge selling it internally," he stated.

"On the integrated advertising side it is more about changing our business model," he added.

With one client on the advertising side of Framestore's business, a campaign had been very successful, MacPherson explained.

"We had a software development team who were getting very nervous because the bill we were going to submit to the client was getting bigger, as when the hits increase so does the amount they pay.

"But I said don't be nervous, give them the bill with a smile, because they wanted to hit a number and they have and now they pay for it," he said.

But Avindra Sehmi, CIO of Oxford Economics, said that after looking at several cloud offerings like Windows Azure and Amazon Web Services, and calculating bandwidth allowances, he found that the costs are currently too high for his organisation.

"Because we allow our customers to take a lot of data from us, they click download and they are literally downloading gigabyes of data and we are delivering a 24/7 data service so it's always busy," Sehmi states.

He believes that until the cost of cloud computing solutions that scale up and down reduces, Oxford Economics will not put data in the cloud.

Framestore CTO MacPherson believes this is because the business model of cloud services has not caught up with the technology, and until it does smaller companies will not be able to benefit from cloud computing.

But according to Labellarte, costs will eventually plummet.

"Some years ago we were interested in an IL3 data centre and it was costing about £600,000 a year, and a year later it was only £60,000 a year, so eventually we'll get there," he says.