4. The Cloud Lowers the Cost of Uncertainty.

Another reason IT organizations have traditionally been conservative about new software investments is because established applications have much less uncertainty associated with them. Since the investment is going into something that the organization is already familiar with, it has much more ability to predict how the application will be used and how its user base and load will grow.

The downside of doing something innovative is that it might take off-which, when expensive proprietary software is in the mix, could end up being highly expensive. Doing something just like everything done before means much less probability of getting an emergency request for a budget variance to buy more costly software.

How-to: 5 Best Practices for Test and Development Projects in the Cloud

Open source, of course, reduces the cost of uncertainty tremendously. If application load grows, no problem-more software can be installed to support the increased load without having to spend a lot of money. Likewise, cloud computing makes obtaining incremental resources to support application growth much less expensive than in the past. This means there is less cost associated with uncertainty, which means less downside potential.