19MARCH 2020According to a recent Forbes article, the seven biggest enterprise cloud vendors posted cloud revenue of $76.3 billion USD­a solid indicator of exponential growth and ongoing demand for cloud services among enterprises. As advanced analytics, IoT and artificial intelligence capabilities proliferate in the coming years, companies will accelerate the transformation of their IT infrastructure and underlying cost structures to be more agile and variable.Corporate managers face the daunting task of unpacking the overall cost components and making wise decisions to drive and measure their cloud investments. In this article, we discuss a framework for organizing the economic components for the cloud and leading practices that managers need to consider while calculating their return on cloud investments (ROCI). The return on cloud investment (ROCI) can be assessed through a standard analysis of the present value of cloud benefits less total cost of ownership.Overview of economic components for the cloud1. Total Cost of Ownership: Compute, storage, labor and support costs involved both at the infrastructure and application layers to build and operate assets on the cloud. One-time migration, training and building bandwidth and networking to the cloud are all included2. Cloud Benefits Realized: This includesa) The cost savings that are derived from migrating to the cloud both at the infrastructure and application layers b) Economic value of risks avoided by securing data, Craig ScaliseUnderstanding the Return on Your Cloud InvestmentsCraig Scalise, Ph.D., Senior Research Fellow, PwC U.S. andRitesh Ramesh, Data and Analytics Leader, Consumer Markets, PwC U.SCXOINSIGHTS
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