With Legacy applications, deciding about expected returns on IT investment has always been a tough task due to numerous cost components involved (Software installations, hardware investments e.g. servers, storage devices, maintenance, training etc.), longer deployment period spread across several financial quarters and nature of benefits achieved. By nature of benefits, I mean, that IT investment not only gives a measureable financial benefits but a majority of benefits are non-financial but crucial too. Also, the legacy packages come with lot of tools/features which are rarely used by organizations. Does cloud computing add a new insight for decision making?
In a recent interview with Forbes Asia, Paul Maritz (CEO, VMWare)1 said that under-hyped thing about cloud computing is the efficiency and simplification that it will bring. For the first time, we are starting to get some objective metrics with which we can measure IT. We can measure our own IT with external benchmark.
While browsing through pages of some leading cloud-based CRM players, a sentence on Microsoft Dynamics CRM website caught my attention: "Don't get forced, Get what Fits".2 Certainly, an aggressive marketing strategy from Microsoft Dynamics over Salesforce.com. On its website, Microsoft Dynamics has put a comparison chart to compare its offering with other major cloud CRM Players (Salesoforce.com and Oracle CRM On-Demand)3. The comparison chart shows that for Salesforce.com Professional edition charge is $65/user/month plus other charges like Mobile, Multidimensional knowledge base, offline access, visual workflow etc. Oracle CRM on Demand charge have been charging $75/month/user plus other charges for Mobile sales assistant, Contact on demand, partner relationship management etc. As it is MS Dynamics website, they have certainly put their offerings as the best deal ($44/user/month). My point here is not to evaluate which of these packages is the best one, but to discuss representation of IT investment in very simple components.
Although it can't be concluded that Cloud based packages provide better returns on the investment keeping data security issues and regulatory policies in view, it certainly puts itself as one of the viable options for decision makers in the organization.