Agility is king for cloud value, but ROI is harder to measure

The old capex-versus-opex approach is finally gone, but the cloud's new value focus on agility is much harder to calculate

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A few years ago, we defined the value of cloud computing in terms of opex versus capex. These days, most people define the value of cloud around agility.

Why the change? Because if you define the value of cloud as the ability to avoid buying hardware and software -- the capex-versus-opex view -- you can't make cloud computing compelling from a cost standpoint. However, if you define the value of cloud as the ability to make your business more agile, you quickly get to the value numbers you need.

I've been shouting about the value of agility and the cloud for years, but I didn't see the view become common in the IT or vendor community until recently. Now, cloud providers are all about agility, and they use it to sell the public cloud to enterprises. Likewise, enterprises now understand that value metrics exist in agility, and they're getting good at defining the worth of agility for internal business cases.

However, there is a problem. For the most part, the value of agility varies widely from enterprise to enterprise, so the actual payoff will vary as well.

For example, one aspect of agility is time to market, which cloud computing can compress because there are no longer extended hardware and software procurement cycles. That means you can quickly deploy automated systems and quickly bring products or services to market. But shorter time to market is more valuable in certain industries than others; for example, it matters more in high tech than in manufacturing.

The lesson is pretty simple at this point: The cloud typically provides value to your enterprise by providing agility, which can shorten time to market or allow for quick deployments or adjustments to business processes. But you need to determine the actual value of that speed or agility for each business case. There's no simple formula as there was in the days of comparing capex to opex.

The good news is that, as time goes on, we'll each get better at determining the value of agility that cloud can bring, as we measure the actual worth delivered from our first cloud deployments.