INTHEBLACK November 2026 - Magazine - Page 30
FEATURE
“For organisations with considerable scale, the cost–benefit
equation can favour owning and operating infrastructure
internally rather than paying for infrastructure-as-a-service
through providers such as Amazon, Oracle Cloud,
Google Cloud or Azure.”
GUY IOPPOLO FCPA, IOPPOLO & ASSOCIATES
READ
an article about the
data centre dilemma
UPSKILL
with CPA Australia’s
Your Technology
Strategy online
short course
READ
an article about
how to choose the
right file storage
for a business
30 INTHEBLACK November 2026
“FinOps increasingly need to understand
which portion of cloud spending represents
consumption, which represents inefficiency
and which represents the deliberate cost of
maintaining control. That distinction matters.
Without it, optimisation initiatives can
unintentionally remove capabilities that
exist specifically to reduce strategic risk.”
For CFOs, infrastructure is now a capital
allocation challenge rather than a simple IT
procurement decision. Cloud infrastructure
investments need to be evaluated over
the full life of the workload.
Salampasis says the comparison should
not stop at whether cloud spending sits
in operating expenditure while on-premise
infrastructure requires capital expenditure.
Rather, a robust model should compare
depreciation, financing costs, utilisation rates,
committed cloud spend, price escalation,
contractual flexibility, residual asset value
and the cost of underused capacity, then test
those assumptions under different growth,
latency and regulatory scenarios.
“CFOs should model cloud, private and
hybrid options over time, asking what to
rent, own or keep portable, what capabilities
and dependencies are needed, how much
contractual lock-in is acceptable, and what
risk appetite the organisation has for
sovereignty, cybersecurity and regulation,”
Salampasis says. “The best answer is
to match workloads to infrastructure
and economics.”
BUSINESS SIZE MATTERS
Guy Ioppolo FCPA, managing partner
of business software solutions consultancy
Ioppolo & Associates, says many large
organisations remain reluctant to migrate
heavily customised enterprise resource
planning software and operating systems
to only public-cloud platforms because the
move can involve a very high cost, major
disruption and substantial business risk.
“Data security and privacy concerns,
particularly for government departments and
other organisations such as financial institutions
where this is a primary focus, make on-premise
or hybrid arrangements attractive,” Ioppolo says.
Cloud costs tend to become less predictable
when organisations move beyond sporadic
or experimental workloads into large-scale,
always-on environments with heavy storage,
high data transfer, complex licensing, multiple
regions and rapidly growing AI demand.
At that scale, small changes in usage patterns,
data movement or service configuration can
materially change the monthly bill.
Ioppolo, who is also chair of CPA Australia’s
Digital Transformation Centre of Excellence,
says that “for organisations with considerable
scale, the cost–benefit equation can favour
owning and operating infrastructure internally
rather than paying for infrastructure-as-a-service
through providers such as Amazon, Oracle
Cloud, Google Cloud or Azure.”
With the growing relevance of AI, he notes
that locating AI engines close to organisational
data can improve responsiveness and control
while reducing concerns about what data
leaves the organisation.
“On-premise AI has become more accessible,
especially through open-source models such
as Meta, Mistral and DeepSeek, and vendors
are increasingly packaging hardware with
preloaded AI and enterprise applications,”
he says.
However, Ioppolo draws a clear
distinction between large organisations
and small-to-medium enterprises, including
most accounting firms.
“For SMEs, cloud is more likely to make
sense because it offers greater flexibility, lower
ongoing infrastructure burden and avoids the
need for specialist staff to maintain on-premise
environments,” he says. “Overall, on-premise,
cloud or hybrid choices should be made
according to business size, cost, information
security, disruption and operational needs.” ■
