What is the price of a mousetrap?
The assessment of value from cloud services.
By Ernie Zibert
Copyright 2012 Ernie Zibert
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Table of Contents
Value from your Cloud provider?
The price of a Mousetrap
If it were only as simple as a mousetrap
IT Infrastructure is a tumour of the modern corporation
Conclusion
In this ebook, I discuss one functional transformation that has taken placed as a result of cloud
services, namely; the impact on the assessment of value. This is a timely discourse as the vast
majority of customers are using cloud services. In fact, numerous recent surveys confirm that more
than 80% of customers are using cloud services (http://www.wired.com/cloudline/2012/03/cloud-here-
to-stay/, http://venturebeat.com/2012/05/10/cloud-services-data/). Moreover, several surveys have
replicated the finding that four out of every five customers believe that cloud services met their flexible
infrastructure needs. The bottom line is cloud services are here to stay and customers must be able to
articulate the value of their cloud investment.
How do you know if you are getting value from your cloud services provider?
In the traditional model, most customers would simply compare their existing IT costs against
their cloud services costs. This is best seen as a ‘generation one’ performance measure. This
measure is no longer suitable for the assessment of value from cloud services. It is akin to
undertaking a Return on Investment (ROI) without taking into consideration the time value of money,

IT Infrastructure is a tumour of the modern corporation. It forces asset specificity; it limits
flexibility, agility, and availability. Most customers have this tumour, and they should actively avoid
growing it.
In another ebook, I explain a new business paradigm, Augmented Managed Services (AMS).
This is yet another approach businesses should use when assessing cloud value. AMS is the
paradigm where a predefined level of demand is managed internally and the remainder augmented
with cloud services. The apothegm is ‘Own the base and rent the peak’.
Conclusion
The customer’s overall cloud health starts with an assessment of value. The assessment of
value of cloud services can only include a comparison against other cloud providers. The comparison
of cost between traditional IT investment and cloud services must be avoided. Such a comparison is
not even apples-to-oranges rather fruits-to-vegies.
About the author:
Ernie Zibert is an influential IT Management Executive with 20+ years of international
achievement in leveraging technology and strategic partnerships to drive growth, performance,
flexibility, and customer satisfaction. A proven change agent, capable of orchestrating transformative
business strategy. Champions innovation with a focus on developing flexible, scalable solutions for
customer and organisational problems. Diverse experience across government, communications and
media, and finance industries. World class financial, relationship and commercial management of IT
sourcing relationships. Respected leader in highly-matrixed global corporate environments and in the
Australian IT Services community.
Other titles by Ernie Zibert:
Discover other titles by Ernie Zibert at Smashwords.com.
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