Cloud Computing Starter Kit: Cost and Business Case Considerations
Cloud computing is a major trend in the information technology (IT) industry that is affecting both commercial companies and Federal Government agencies due to its promise of agility, scalability, and cost savings. Prior to investing in cloud computing, decision makers are asking “what is my return on investment (ROI)?’ However, there is no one size fits all answer to this question and caution should be exercised when applying generic rules of thumb and quick assessment cost and economic models. Costs, benefits, and risks must be carefully assessed for each situation. Developing a business case for cloud computing is essential in order to make an informed decision and derive value from a cloud-based IT investment. Performing an engineering and economic analysis to assess each specific situation is key to accurately estimate costs and potential returns. Each organization will likely have different goals and circumstances that make their analysis unique. The authors researched and examined this topic with subject matter experts resulting in a Cloud Computing Starter Kit comprised of developed models and methodology insights.
The authors will present the usefulness of the Cloud Computing Starter Kit when conducting a business case analysis of traditional IT (status quo environment with minimal sharing of IT infrastructure) versus a cloud computing scenario, with a primary focus being from a service consumer perspective. Included in the Cloud Computing Starter Kit are an analysis of strengths, weaknesses, opportunities, and threats (SWOT), a work breakdown structure (WBS) Framework model to aid identification of major activities that need to be considered, insights into key areas of cost increases, cost decreases, cost drivers, economic indicators, non-dollar benefits, risks, ROI, and tailoring of traditional cost-benefit analysis models. Also considered in the Cloud Computing Starter Kit are economic insights on emerging areas within cloud computing, such as big data analytics and cloud brokers. The Cloud Computing Starter Kit insights will be useful to both cost analysts and engineering communities in the development of a comprehensive business case and in providing a deeper and multi-disciplined understanding of the economic implications of implementing cloud computing.
Jennifer Manring is a Principal Economic Analyst in MITRE’s Economic and Decision Analysis Center (EDAC). She has over 17 years of cost estimating experience supporting DoD, Intel, and Civilian programs. Her experience includes providing full life-cycle cost estimates, independent cost estimates, cost benefit analyses, analysis of alternatives, cost sensitivity and risk analysis, earned value and schedule analysis, and data collection and analysis on multiple types of systems and platforms. Programs supported include a wide variety of IT and weapons systems programs ranging from small programs to ACAT I programs with a specialty area of expertise in software development, integration, and maintenance. She has conducted extensive research on multiple topics including service oriented architecture, cloud computing, and acquisition success. Jennifer holds a MS degree in Math from Virginia Tech.
Raj Agrawal is a Principal Economic Analyst in MITRE’s Economic and Decision Analysis Center (EDAC). He has supported several DoD and Army sponsors in business case development, cost-benefit analyses, lifecycle cost estimation, economic analyses, and cost assessment, with focus on IT systems. In addition, Raj was involved in development of the GAO Cost Estimating and Assessment Guide, with a contribution for software estimation based on system use cases. He has over 25 years of experience in business, technology, software, and management. Prior to MITRE, Raj worked in Unisys Corporation’s Public Sector Division, where he was Development Center Manager and Lead Project Manager for R&D projects. Raj is an ICEAA Certified Cost Estimator/ Analyst, PMI certified PMP, and holds BS and MS degrees in engineering and an MBA.