Delivery Accelerating Infrastructure

Successful infrastructure deployments share some common traits that can be leveraged to accelerate infrastructure delivery. One of the most well-known strategies is “value capture” in terms of project finance or funding model. Stakeholders who want to improve their infrastructure but are not invested in the technical know-how often leverage this approach. Funding can become an issue when management and leadership vie with each other over the budget and the consumers of the infrastructure do not have to pay for it. This is exacerbated by improper or inadequate planning for the allocated budget. When users pays for the infrastructure, even in part, it is mutually beneficial to the infrastructure team and the users. So, direct taxation and value capture, both help to recover for public use some part of the rise in business value that infrastructure improvements create.

In terms of the increase in value of cloud workloads, we are measuring scalability cost savings, continuous availability, and significant reduction in Total Cost of Ownership (TCO) from on-premises. Increase in convenience in terms of the cloud acting as a sponge for aggregating traffic worldwide and reduction of logistics pertaining to on-premises equipment can also factored into the value capture. Some value is also captured via the increased demand on the current workload from proposed infrastructure. Such gains can fund infrastructure projects when the budget is inadequate. Value capture provides capital for infrastructure improvement and underpins borrowing and enables financial flexibility. That said, value capture is not a panacea and must be grounded in the ability to measure and use workload and business value improvement. It requires boundaries to be defined to correctly assess the increase in value improvement. Transparency and record-keeping of current investments and value are prerequisites. It works best where infrastructure projects have a high degree of correlation to business value of workloads. Costs for subsequent funding and maintenance cannot be tied back to value capture after the initial realization of capital but it can cut development costs and generate incremental tax revenue. Its success depends on long-term organizational support for finance.

There can be several types of value capture, and these are all based on utilizing it once and not repeatedly for the same infrastructure. It provides financing for growing demand where the existing budget fails to meet the costs of the infrastructure from the increased demand. Innovative solutions are available for financing the world’s growing demand for cloud infrastructure, but it demands organizational commitment and collaboration between technical and finance teams.