Cloud, SOA and why a CFO should care

Most discussions on Cloud Computing I’ve been reading are focused on the infrastructure and technology part. It offers easy to deploy infrastructures or even applications in a very scalable way. All this in a pay-per-* way. And here is where a CFO should get interested. Moving to a Cloud implies moving from CAPEX to OPEX. Usually a CFO has an idea on how to keep these balanced. The Enterprise Architecture of some organizations even have very strict guidelines on whether certain expenses should the one or the other. So that’s the first one to thing about…

As was stated in a previous blogpost on measuring the business value of SOA, project metrics for business value created by SOA projects, IT projects, or even projects in general are rare. If I were a CFO this would worry me.
Besides that SOA efforts in a way also demand a different way of cost accounting than the traditional silo based. If my organizational unit owned (and had to account for the costs) of a rather popular often reused service, I would like to charge them. Say for example in a pay-per-service-call way. How do the financial systems under the responsibility of the CFO facilitate this?

Of course there will be lots of other stuff on your agenda if you are the CFO. But hey due to the crisis interest rates are low, labor is cheap, as are materials, so why not invest now in the foundation/infrastructure for the future 😉
If you’re a CFO and – by incident – are reading this blogpost please let me know what you think, and add a comment…

3 thoughts on “Cloud, SOA and why a CFO should care

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  2. Tim C

    The cloud environment reminds me of the CLEC buildout in the 90’s. Everyone was building capacity and suddenly the bubble burst. Hundreds of companies are building cloud capacity. The market will be over saturated and cloud service capacity will be severely discounted in the near future when everyone realizes the financial model doesn’t support hte capacity buildout. That is when you take your precious capital and invest in building cloud capabilities. It would not hurt to start building cloud skill sets in your key IT teams, but it doesn’t make sense to make a huge investment in internal cloud capabilities or betting the bank on cloud service providers since the standards and other capabilities are not mature.

  3. PeterPaul Post author

    Like during the CLEC buildout, the service that is (for the major part of the vendors) offered will is a commodity or will be in short term. In markets like these it is very hard to show the additional value offered compared to competitors. This has a significant effect on pricing and because of that on the ROI. Investing during the hype can be tempting… however as your stating when standards and other capabilities haven’t matured yet, be very careful to invest if you haven’t got a clear plan on how to earn money.

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