Cloudware Basics - Guide to Cloud Computing for Business and Technology Managers - page 270

TABLE 13.4
Comparison of Cloud Beneits for Small and Medium Enterprises (SMEs) and Large Enterprises
Economic
Beneits Small and Medium Enterprises (SMEs) Large Enterprises

Strategic
lexibility

Critical in getting quickly to market.
Cloud services allow start-ups to
rapidly develop and deploy their
products as long as they can use the
open source or proprietary
development platforms of the cloud
providers. As the cloud market
offerings mature, there will be many
more platform options available.

Cloud services can provide large enterprises the same strategic beneits as start-ups for
new initiatives as long as legacy software integration and data issues are not
signiicant. With appropriate software development talent, operating units can
rapidly develop and market test new innovations without putting additional strain
on IT budgets, staff, or hardware. Long-standing internal IT management policies
and standards may have to be reexamined and modiied to allow this to happen.

Cost reduction Pay-as-you-go pricing may be critical if

operating capital or venture capital
funding is not available. With cloud
services, growth can more easily be
funded through operating revenues
and there may be tax advantages to
converting what would have been
longer-term depreciation expenses to
fully loaded current expenses.

Cloud services provide the same cost-beneits for isolated and exploratory initiatives.
Instant availability and low setup costs for new development and deployment
environments allow operating units to explore new initiatives quickly at low cost
without increasing internal IT hardware or staff overheads. For high data trafic
volumes, it may become more economical to bring the operations in-house. Because
maintaining legacy hardware and software absorbs the majority of IT costs, large
corporations may see signiicant costs savings by selectively moving noncritical
applications and processes to external clouds.

Software
availability

Software as a service (SaaS) and
platform as a service (PaaS) provide
necessary software and infrastructure
at low entry cost. Limited online
version functionality may be more
than offset by dramatic cost savings.

Existing volume licensing of legacy desktop and process-integrated enterprise
software may make the status quo more attractive if end-user retraining, process
modiications, and other change costs are high. Legacy desktop software may have
more features and functionality than is currently available in SaaS versions. But the
legacy software licensing costs may dramatically increase if it is hosted in a private
cloud environment.