To Move or Not to Move: An Iterative Four-Phase Cloud Adoption Decision Model for IT Outsourcing Based On TCO

Information technology outsourcing (ITO) of organizations on cloud datacenter promises cost effectiveness over traditional on-premises deployment. In this regard, making sustainable decision toward cloud adoption needs profound understanding of cost implications, and social environmental issues. There are several concerns and challenges policymakers face when they encounter with IT options’ dilemma. Although the cloud migration has potentially merits account for reduction in total cost of ownership (TCO), there may exist demerits for especial situation of each industry and organization such as degree of uncertainty on privacy, security and communication delay concerns. This paper introduces an iterative four-phase cloud adoption decision model for IT outsourcing to solve industries’ and organizations’ concerns and challenges by considering cost implication of each contingent options and applying the net present value (NPV) of each alternative during the period of investment along with non-economic issues analysis. Also, the model leverages Moore law and Delphi panelists’ interview to estimate price of IT devices in future and to weight cloud adoption determinants and inhibitors respectively. The new services of Telecommunication Company of Mazandaran province (TCM) which is a large scale industry in IRAN are used as a case study to evaluate the effectiveness of proposed model for six years of investment. Implementation of the model for TCM shows that it is better to establish private datacenter on-premises and apply hybrid deployment in burst of resource demand.