Welcome!

@CloudExpo Authors: Elizabeth White, Pat Romanski, Yeshim Deniz, Liz McMillan, Aruna Ravichandran

Related Topics: @CloudExpo, Containers Expo Blog

@CloudExpo: Blog Feed Post

Cloud Computing Economics: 40-80% Savings in the Cloud?

Cloud will mean a change in the way you do business

Given the state of the global economy and the increasing adoption of Cloud computing it’s no surprise that lately there have been a number of articles on achieving Cloud computing savings ranging from 40% savings according to an EEOC case study to as much as 80% savings according to Microsoft.

However, not everyone seems to believe that they can save money by migrating to the Cloud. A common conversation that I often encounter with business owners is that they have done a “direct” comparison, and don’t see how they can save money migrating to the Cloud. One of those points is addressed in Sourya Biswas’ post, “Looking Back at Joe Weinma’s 10 Laws of Cloudonomics” on CloudTweaks excerpt below.

Utility services cost less even though they cost more.
When a company goes on to the cloud, it may pay more per unit of the service than if it owned the resources itself. But, with cloud computing’s on-demand revenue model, it doesn’t pay anything when those services are not required. This works out much cheaper in the long run.  (See: How Cloud Computing Can Save You Money)

Though aside from scaling down and turning off your highly virtualized environment when not in use, in my years of working with IBM I noticed that even the most sophisticated customers often don’t account for all their costs.  A common scenario is the 3 year comparison. So what are you going to do after 3 years? You don’t plan to refresh your hardware? No software upgrades? Flat labor costs? No increase in healthcare costs for that labor?

I have seen many comparative analysis ignore labor costs altogether and account only for hardware costs; or compare an on-premise VM to a VM in the Cloud with some going as far as to create VM sprawl in order to get the cost of a VM unit down to match a Cloud Service Provider.

Sure, with a narrow analysis, if you take your $100,000+ system and divide by hundreds or thousands of underutilized VMs, your IT shop may artificially look competitive, though I doubt your CFO will be fooled by such a comparison.

There is an inherent conflict of interest when a CEO / CFO asks the CIO to show them how they can migrate significant portions of the IT business unit to an alternative provider. Without a doubt you’ll need your CIO to navigate your business through those tricky Cloud waters, but in my opinion, you’ll also need an independent analysis by an objective 3rd party.

Preferably, that 3rd party is not a legacy IT vendor who will persuade you into building the largest Private Cloud your business has ever seen, nor should it be a Cloud Service Provider touting a Hybrid or Public Cloud that may gloss over the complexity of managing distributed applications on cloud infrastructure, securing your data, and Service Level Agreement (SLA) considerations you should weigh carefully. What good is an SLA that waives the cost of the service, if your business being down will cost you 10 times that amount?

A move to the Cloud doesn’t just mean shifting your IT infrastructure. It will mean a change in the way you do business.

If you want the business agility and savings that the Cloud provides, you have to be prepared to change your processes. It doesn’t do much good to be able to bring up a VM in seconds or minutes if you have a 4-12 week legacy procurement process that no longer involves acquiring physical hardware, but VMs, while still requiring numerous management and finance approvals for what may be a temporary VM instance (and amount to a small expenditure).

In my experience, the process at many enterprises take the same length of time whether it’s a 5 or 50 server purchase. Those processes will have to be re-engineered if one is serious about conducting business in the Cloud.

You’ll also have to contend with managing a change in human behavior. To maximize the benefit of your IT resource shift to the Cloud you’ll have to get IT used to shutting down VMs when not in use, not just firing up a physical server and monitoring it for problems.

In his Cloud Connect keynote on Wednesday, Forrester Vice President and Senior Analyst James Staten told a capacity crowd that to save dough with the cloud, it’s important to be able to scale usage back and turn off the cloud when it’s not needed.

“The power of cloud computing comes through these two words: Down and off,” Staten said.

If you have a small shop where no one works on the weekends or holidays, you want to inactivate those VMs over those periods. Compare that to turning off that $5000 on-premise server. You still have a $5000 hunk of metal in your datacenter capital expenditure, even worse, it may be financed, and that interest meter certainly doesn’t stop running.

You don’t have to believe the Cloud can deliver savings, you just have to conduct a proper comparative analysis – the savings will be there waiting for you.

-Tune The Future-

Read the original blog entry...

More Stories By Ray DePena

Ray DePena worked at IBM for over 12 years in various senior global roles in managed hosting sales, services sales, global marketing programs (business innovation), marketing management, partner management, and global business development.
His background includes software development, computer networking, systems engineering, and IT project management. He holds an MBA in Information Systems, Marketing, and International Business from New York University’s Stern School of Business, and a BBA in Computer Systems from the City University of New York at Baruch College.

Named one of the World's 30 Most Influential Cloud Computing Bloggers in 2009, Top 50 Bloggers on Cloud Computing in 2010, and Top 100 Bloggers on Cloud Computing in 2011, he is the Founder and Editor of Amazon.com Journal,Competitive Business Innovation Journal,and Salesforce.com Journal.

He currently serves as an Industry Advisor for the Higher Education Sector on a National Science Foundation Initiative on Computational Thinking. Born and raised in New York City, Mr. DePena now lives in northern California. He can be followed on:

Twitter: @RayDePena   |   LinkedIn   |   Facebook   |   Google+

@CloudExpo Stories
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities – ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups. As a result, many firms employ new business models that place enormous impor...
SYS-CON Events announced today that Taica will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Taica manufacturers Alpha-GEL brand silicone components and materials, which maintain outstanding performance over a wide temperature range -40C to +200C. For more information, visit http://www.taica.co.jp/english/.
SYS-CON Events announced today that Dasher Technologies will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Dasher Technologies, Inc. ® is a premier IT solution provider that delivers expert technical resources along with trusted account executives to architect and deliver complete IT solutions and services to help our clients execute their goals, plans and objectives. Since 1999, we'v...
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, will discuss how they b...
We all know that end users experience the Internet primarily with mobile devices. From an app development perspective, we know that successfully responding to the needs of mobile customers depends on rapid DevOps – failing fast, in short, until the right solution evolves in your customers' relationship to your business. Whether you’re decomposing an SOA monolith, or developing a new application cloud natively, it’s not a question of using microservices – not doing so will be a path to eventual b...
SYS-CON Events announced today that MIRAI Inc. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MIRAI Inc. are IT consultants from the public sector whose mission is to solve social issues by technology and innovation and to create a meaningful future for people.
SYS-CON Events announced today that TidalScale, a leading provider of systems and services, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale has been involved in shaping the computing landscape. They've designed, developed and deployed some of the most important and successful systems and services in the history of the computing industry - internet, Ethernet, operating s...
The session is centered around the tracing of systems on cloud using technologies like ebpf. The goal is to talk about what this technology is all about and what purpose it serves. In his session at 21st Cloud Expo, Shashank Jain, Development Architect at SAP, will touch upon concepts of observability in the cloud and also some of the challenges we have. Generally most cloud-based monitoring tools capture details at a very granular level. To troubleshoot problems this might not be good enough.
SYS-CON Events announced today that IBM has been named “Diamond Sponsor” of SYS-CON's 21st Cloud Expo, which will take place on October 31 through November 2nd 2017 at the Santa Clara Convention Center in Santa Clara, California.
The next XaaS is CICDaaS. Why? Because CICD saves developers a huge amount of time. CD is an especially great option for projects that require multiple and frequent contributions to be integrated. But… securing CICD best practices is an emerging, essential, yet little understood practice for DevOps teams and their Cloud Service Providers. The only way to get CICD to work in a highly secure environment takes collaboration, patience and persistence. Building CICD in the cloud requires rigorous ar...
Join IBM November 1 at 21st Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA, and learn how IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Cognitive analysis impacts today’s systems with unparalleled ability that were previously available only to manned, back-end operations. Thanks to cloud processing, IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Imagine a robot vacuum that becomes your personal assistant tha...
Data scientists must access high-performance computing resources across a wide-area network. To achieve cloud-based HPC visualization, researchers must transfer datasets and visualization results efficiently. HPC clusters now compute GPU-accelerated visualization in the cloud cluster. To efficiently display results remotely, a high-performance, low-latency protocol transfers the display from the cluster to a remote desktop. Further, tools to easily mount remote datasets and efficiently transfer...
SYS-CON Events announced today that TidalScale will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale is the leading provider of Software-Defined Servers that bring flexibility to modern data centers by right-sizing servers on the fly to fit any data set or workload. TidalScale’s award-winning inverse hypervisor technology combines multiple commodity servers (including their ass...
As hybrid cloud becomes the de-facto standard mode of operation for most enterprises, new challenges arise on how to efficiently and economically share data across environments. In his session at 21st Cloud Expo, Dr. Allon Cohen, VP of Product at Elastifile, will explore new techniques and best practices that help enterprise IT benefit from the advantages of hybrid cloud environments by enabling data availability for both legacy enterprise and cloud-native mission critical applications. By rev...
Infoblox delivers Actionable Network Intelligence to enterprise, government, and service provider customers around the world. They are the industry leader in DNS, DHCP, and IP address management, the category known as DDI. We empower thousands of organizations to control and secure their networks from the core-enabling them to increase efficiency and visibility, improve customer service, and meet compliance requirements.
In his session at 21st Cloud Expo, Michael Burley, a Senior Business Development Executive in IT Services at NetApp, will describe how NetApp designed a three-year program of work to migrate 25PB of a major telco's enterprise data to a new STaaS platform, and then secured a long-term contract to manage and operate the platform. This significant program blended the best of NetApp’s solutions and services capabilities to enable this telco’s successful adoption of private cloud storage and launchi...
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend 21st Cloud Expo October 31 - November 2, 2017, at the Santa Clara Convention Center, CA, and June 12-14, 2018, at the Javits Center in New York City, NY, and learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
Amazon is pursuing new markets and disrupting industries at an incredible pace. Almost every industry seems to be in its crosshairs. Companies and industries that once thought they were safe are now worried about being “Amazoned.”. The new watch word should be “Be afraid. Be very afraid.” In his session 21st Cloud Expo, Chris Kocher, a co-founder of Grey Heron, will address questions such as: What new areas is Amazon disrupting? How are they doing this? Where are they likely to go? What are th...
SYS-CON Events announced today that N3N will exhibit at SYS-CON's @ThingsExpo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. N3N’s solutions increase the effectiveness of operations and control centers, increase the value of IoT investments, and facilitate real-time operational decision making. N3N enables operations teams with a four dimensional digital “big board” that consolidates real-time live video feeds alongside IoT sensor data a...
In the fast-paced advances and popularity in cloud technology, one of the most critical factors revolves around concerns for security of your critical data. How to assure both your company and your customers they can confidently trust and utilize your cloud environment is most often top on the list. There is a method to evaluating and providing security that exceeds conventional modes of protecting data both within the cloud as well externally on mobile and other devices. With the public failure...