Have your head in the cloud? You're not alone. 
We all know that putting infrastructure in the cloud helps reduce IT costs, while redirecting the flow of our resources to areas that grow our businesses.
But cloud ROI remains a puzzle for many of us - especially if we've just invested in more physical infrastructure and are considering a hybrid cloud model that helps bridge IT cost and capital constraints and gives us room to grow.
It's important we not go blindly into thinking cloud is all about cost savings. But it can help us optimize costs by allowing us to shift from a capital expense model to one based on operating expenses.
Here are a few factors to consider when optimizing cloud cost:
Hardware and Infrastructure. Cloud's obvious advantages lie with server consolidation and resource management. But don't forget to look at cost savings related to reduced data center space, power and cooling, and any networking costs. Hybrid and public cloud options, for example, may involve more extensive wide-area networking than that of private clouds.
Lifecycle costs. Lifecycle costs lower dramatically when you're not relying on in-house infrastructure. Nevertheless, when negotiating cloud contracts, executives should examine implementation options with an eye toward future growth, basic versus advanced services or a blend of services, service-level agreements, security, and even compliance assurances and monitoring you may need over the course of the agreement.
Budget and billing arrangements. Flexible billing and service-usage metering are cornerstones of many cloud agreements. These arrangements make it easy for IT organizations to bill business units for resources like a utility company would. This also provides greater visibility into resource usage so that CIOs can effectively forecast their budgets. Public and hybrid cloud providers may also offer pay-as-you-use services, requiring no long-term commitment.
Long-term strategy. Cloud's promise of compute power flexibility and scalability can enhance the way companies develop and market successful products and services and innovate. Of course, these are not easy to quantify. But they need to be looked at as part of the equation.
To realize cost-optimized cloud computing, we must weigh our application requirements against existing costs and factor that into our long-term IT and business goals. That takes knowing which costs to track and setting benchmarks accordingly.
Cloud is not a one-size-fits all solution, and evaluating these factors will also help you determine the model that's right for you, whether that's public, private or hybrid.
James Parker is senior vice president of sales at Savvis, a CenturyLink company.
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