One of the indicators to a shift in maturity level of a market towards a disruptive technology, is when people start looking at it strategically and not like a technology. This appears to be the case in the cloud computing community, where a number of people are speaking about utilizing the cloud as a strategy instead of a tactical tool, and what this changing market focus means for today’s enterprise. No longer is the cloud the system for developers experimenting with new systems of engagement, rather it is fundamentally reshaping how people view IT in the enterprise.
As I discussed in last week’s blog post, financial management of the cloud is only increasing in importance. Virtually every IT department is facing pressure and scrutiny from their finance department to show the connection of deployments to the business objectives and metrics of the organization.
There are a number of challenges with this push to manage cloud IT costs in relation to the business processes of an organization and an array of places where the cost/business correlation is critical. Here are a few examples of where cost issues could be better aligned to a business strategy:
- Resources utilization: Let’s have a look at an enterprise that leverages the cloud to provide services to several business units within the organization. How does the CIO determine the right allocation of cloud resources for each business unit? How does the CFO define the right charge-back for each business unit based on its usage? Is there an added layer of information that is needed beyond memory use or CPU throughput?
- Pricing Modeling: For ISVs that provide a shared platform used by many customers, there is also a pressure to understand the hidden cost of cloud services and charge customers based on volume of usage and data. If hosted in a public cloud environment, utilization and cost management is increasingly complex – often pulling information from many different areas in the cloud. Discovering the hidden costs for these customers is critical in approaching the correct pricing strategies and support models.
- Capacity Planning: Organizations with growing number of customers or influxes in data are using the cloud to create scalable solutions to support such changing business requirements. To optimize the balance between operational and financial objectives, these organizations require the ability to analyze and forecast potential costs in a granularity of transactions and processes, and select the optimal configuration of the cloud based on such metrics.
Cost allocation analysis and efficient cloud cost monitoring are critical in understanding how to match cloud implementations with various financial objectives.
Cloudyn’s offerings can outline where cloud spending is happening and how to optimize current costs. We can also enable some foresight into future usage patterns and potential cost implications. As we continue developing deeper insight into cloud allocation modeling, we look to you for help in identifying the core capabilities you feel will help manage your cloud infrastructure as a business. We welcome your feedback on this blog, or contact me directly at sharon (at) cloudyn (dot) com with your thoughts, requirements, or worries about how to manage the cost of doing business in the cloud.