This sponsored post is produced by Rackspace.
“By 2015, according to Gartner research, 50% of large global enterprises will rely on external cloud computing services for at least one of their top 10 revenue-generating processes.”
[aditude-amp id="flyingcarpet" targeting='{"env":"staging","page_type":"article","post_id":1648419,"post_type":"sponsored","post_chan":"sponsored","tags":null,"ai":false,"category":"none","all_categories":"business,cloud,enterprise,entrepreneur,","session":"D"}']If you’re considering moving to a managed cloud — a solution where the vendor actively manages, patches, and troubleshoots your cloud environment—chances are that total cost of ownership (TCO) is the driving factor in your decision-making. How much will it cost you compared to an unmanaged solution? How will those costs compare to the savings in administrative and personnel costs?
Depending on your business needs, a raw cost analysis may or may not be enough to justify the move to managed cloud. But it’s also important to think about less tangible advantages. For example, how do you factor in employee morale and time to market? Benefits like these are hard to put a price tag on, but it’s important to take them into consideration. Along with a TCO analysis, they’ll help to give you a more complete picture of the managed cloud’s total value of ownership (TVO).
Getting one up on the competition
One benefit of a managed cloud approach is that it frees up existing resources, enabling businesses to spend more time on strategic work and innovation. Allocating more resources to activities that actually move the needle will often lead to better products and higher sales. This, in turn, creates competitive advantage. Consider some of these examples:
- A startup can harness the managed cloud to streamline their technical recruiting by hiring more developers with strategic skills but fewer operations engineers and sys admins to “keep the lights on.” Investing in strategic talent can take an organization further.
- An SMB can experiment with Big Data (generating insights and customizing offerings for customers) without investing in expensive skills-sets like data scientists and the data platform to drive it all. Smarter data means smarter business.
- For a software vendor building an app, DevOps testing and maintenance can be offloaded to the managed cloud, allowing them to free up talent within the business to develop the code sooner — and get the app to market sooner.
Faster to market
Completing a project to schedule often depends on resource limitations, and a managed cloud solution can save time and costs associated with procuring, testing, and deploying cloud infrastructure. As such, businesses should identify some of the more abstract benefits that stem from improved time-to-market.
For instance, failure to deploy a new CRM solution before a peak month can have a huge disruption on sales. Similarly, being slow to market with new features can cause you to miss out on opportunities, particularly when in cases where your competitors already provide the functionality in question.
Freedom to adapt and innovate
In a world where most IT departments are increasingly asked to do more with less, the flexibility offered by a managed cloud approach can be a key differentiator. Freeing up IT resources to pursue new initiatives can allow businesses to establish positions as market-leaders, rather than followers. And not only can the managed cloud approach offer IT teams more opportunity to innovate, but it can also give them more time to explore badly-needed improvements elsewhere in the business.
For instance, imagine that your accounting department needs your CRM solution to integrate better with your billing system. Making that happen may not be feasible if IT is tied up managing email servers or backing up databases. But if those tasks were managed externally, your team might have the time to meet with accounting and sales in order to gather requirements and investigate solutions.
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Making these improvements can have a tangible impact on your bottom line. According to a recent study, if a hypothetical financial services firm running approximately 40 servers over the course of a year were to gain agility like the business does in the example above, the revenue and productivity could increase by $368,830.
Happier and more-skilled employees
Managed cloud gives your IT team a break from patching, migration, and other tedious chores. Enabling IT to focus on higher-value projects not only adds more value to the company, but also keeps your people feeling challenged and engaged. And more challenged, engaged employees — happier employees — do better work.
In addition, working with a managed cloud provider can give your IT team a chance to learn from top IT professionals with experience and certifications across a broad swath of disciplines, like Red Hat and Cisco. Other staff members will have a chance to learn and pick up new skills too, such as your web developer becoming a Magento platform-certified technician. This acquisition of skills will result in happier, more skilled employees.
Looking at all of these advantages of a managed cloud approach, it’s clear that TCO isn’t the only factor in deciding whether to take the plunge. Uncovering the total value of ownership, such as competitive advantage, time to market, adaptability, and employee satisfaction, is just as important as calculating raw cost savings. Knowing the TVO gives your stakeholders the opportunity to explore the extra benefits and make informed decisions.
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