Monetizing in the cloud: five questions CFOs should ask.

• Author: Swartz, Scott
• Position: TECH STRATEGY - Chief financial officers

Most chief financial officers understand that cloud computing is changing the way their companies consume computing resources, as well as the way they access and deliver their services. The reasons are straightforward.

There is the attraction of easy and ubiquitous access to powerful applications and development tools for one. Automatic scaling of storage and processing power for another. Huge reductions in data center costs; predictable usage-based running costs; worry-free backups, disaster recovery, and maintenance are others still.

And CFOs understand that the ability to quickly respond to market demands by being in the position to deliver the (often innovative) services that customers increasingly want without needing to build out new, complex and expensive internal information technology infrastructures necessary to support them is a major plus. In this latter area, the cloud is the enabler of winning greater market share and reducing costs.

This double-whammy may be the CFOs dream, but he or she still needs to be convinced that the cloud plan will deliver. Ask these five questions to help make sure the cloud opportunity is fully leveraged to build their businesses:

1. Are we exploiting opportunities of scale?

   With many users dynamically sharing a common platform, there are benefits from economies of scale and greatly increased productivity to be reaped. The cloud has the potential to enable richer service offerings and drive new and more sophisticated business models.

   The cloud is about on-demand, dynamic scaling of computing capacity; the value obtained is in direct relation to how this capacity is used.

   For example, an application utilizing significant disk storage is quite different than an application with intensive algorithms with considerable disk input/output.

2. Have we built a monetization plan that maps to consumption?

   Within a shared infrastructure, it is important for organizations to understand their consumption and pay for it accordingly. Delivering services via the cloud offers benefits for organizations and their customers, but those benefits are worthless if companies can't adequately bill for dynamic agreements.

   The question organizations are pondering is not, "Can I do it in the cloud?" (The answer, by the way, is almost always "yes.") Rather, the prevailing question today is, "Can I monetize it when I get there?" The answer to this question is also, "yes," but it will require a new approach tailored to the realities...