If it ain't broke, don't fix it. This folksy aphorism has been the impetus of a lot of business decisions, and in many cases, it works well enough to be routinely employed. However, sometimes, this philosophy leaves something to be desired, and in next generation communications that's especially true. Recently, Nokia (News - Alert) offered a financial analysis which showed that not fixing the legacy information technology (IT) systems that aren't broken, but not providing what a private cloud could be, is actually costing businesses big money.
Nokia's study revealed that those who move to the next generation communications capability of a private cloud could be saving at least 25 percent over the course of five years based on current IT costs. Nokia's study, known as the Nokia Enterprise Private Cloud Total Cost of Ownership (TCO) Model, represented the first such study the industry had ever seen, and showed how a business that went from a legacy IT system to a private cloud could actually break even on that investment in less than three years thanks to the savings involved.
Normally, when users advocate a move to private cloud, the supporting analysis looks at operational and business benefits, a means to potentially increase revenue by offering better, more flexible, and more streamlined systems. The Nokia model, meanwhile, focuses on cost savings, a point that many IT managers start looking at. Nokia starts by noting that hybrid cloud systems—either public or private—can indeed be cost effective thanks to the use of off-the-shelf components in construction.
Basing its findings on a representative IT environment, and running said representative environment through a move to private cloud—including such considerations as facilities costs and the like—the Nokia model can generate a look at potential cost impacts to make its findings. By way of validation, analyst firm IDC (News - Alert) evaluated the model and found it satisfactory. IDC' noted that the assumptions in the model were sound and “supported by 3rd party references,” while the industry data, default settings, algorithms and calculation methods involved were all appropriate and correct.
Essentially, the study should prove valid across a variety of industries and demonstrates rather conclusively how a switch to a private cloud environment can mean big savings over a traditional legacy environment using next generation communications systems. Armed with such data, it should be easier than ever before to get the backing of the C-suite, which is vital to any major technological change.
Potential revenue increases are great, but in the end, they're just that: potential increases. Actual cost savings means more cash kept, and if revenues just remain static, that means more profit. Nokia's study should prove welcome for all those eager to make the jump to private cloud.
Edited by Alicia Young