Understanding The Real Cost of Cloud

Cloud visions can come crashing down when the reality costs of poorly understood implementations come to bear. Some customers I have worked with over the years have seen cost variances that fluctuate as much as a 100% from the original business case.  Despite all the Cloud experts, technologies and consultants – even the best laid plans could be side tracked if costs rise out of control.  This is in part due to the nascent nature of Cloud computing being full of hidden costs, surprises and the clash of changes that are currently impacting IT.

In Client4Cloud we talk about some of the key planning concepts required to address the “Clash in the Cloud” that is creating disruption with IT Departments everywhere.  Like an onion the Cloud has complex layers that as you peel them away could uncover additional interdependent costs.

In iSpeak Cloud: Crossing the Cloud Chasm – we provide prescriptive guidance on how to build a cohesive business case that accounts for the many changes that Cloud Computing represents to IT beyond technology.  People and process are some of the biggest factors impacting costs.  Few realized that by moving to a cloud based platform with a 3rd party tool that the people resources and process improvements they are working on are not capital expenses because you do not own but rent public cloud and/or software as a service solutions.

Here are 10 key steps Asset Managers could take to support CIO Cloud efforts, reduce hidden costs and cloud stall from Client4Cloud:

  1. Move to a Product Portfolio View -plan your implementations based on solutions being offered and issues solved.  Create best practices around  a Service Catalog approach that has sufficient charge back or show back to insure funding is being allocated to the correct projects.
  2. Calculate costs based “depreciable life” of service – not just initial investment. many programs are calculated just on the initial investment but do not take into account the true total costs of ownership required to support the “products” over their lifespan with the company.
  3. Refactor resources based on area of expense.  Many development teams will not only take depreciation on hardware but also time to create the software.  If the product will be resold or used in the same manor it was previously but on a 3rd party cloud – it is important to refactor what the resource costs will be.
  4. Use Reverse Proxies with your Configuration Management Tools - The dirty little secret in the industry is you could monitor inventory of 3rd party systems with even previous tools.  If the Configuration Management Tool supports a reverse proxy then you would want to host it in the 3rd party cloud environment to report back on what you are using in terms of licenses attached to your account.
  5. Understand Integration, Tuning and Timing – It is important to understand what resources are being used, which aren’t and why, along with integration points and overall minimal requirements for timing across intersecting projects.



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