Posted by: TheTechster
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added and updated.
For IT leaders and decision-makers, one of the challenges in building a business case for any technology investment is to articulate and, where possible, provide metrics that illuminate how and where the technology lowers total cost of ownership (TCO).
Hybrid cloud is, of course, no exception.
As we’ve seen with virtualization, IT organizations are anxious to embrace technologies that reduce costs, improve efficiencies and accelerate time to value for the business. In many ways, cloud computing represents the next evolutionary step in the virtualization path, and hybrid cloud is an important development in the evolution of the cloud paradigm.
IT and business leaders clearly recognize the enormous potential of hybrid cloud solutions to lower TCO. According to IDC’s 2012 CloudTrack Survey, “cost efficiency” was cited as the most critical characteristic of cloud deployments, with 85% of respondents saying it was critical to their organization’s use of the cloud.
So what are some of the areas for IT to examine as they build their TCO models for hybrid cloud? Here are five to consider:
- Reduce Capital Expenditures: As we’ve seen with virtualization, the positive financial impact of infrastructure consolidation can be dramatic. With hybrid cloud, IT should be able to isolate the costs of incremental hardware and software purchases, versus the costs of using cloud services for specific workloads and use cases. Some of the workloads we discussed in our previous post—such as backup, archiving, disaster recovery and test/development—will provide clear financial benefits of using hybrid clouds to reduce capital expenditures.
- Reduce Operating Expenditures: As you move specific workloads to the hybrid cloud, you have the opportunity to reduce costs for maintenance, upgrading, patching and other day-to-day functions of the IT department. Rather than thinking of hybrid cloud as a way to reduce personnel, IT should be looking at it as a way to deploy personnel more strategically, particularly as businesses look to the cloud to accelerate the creation and delivery of new business services.
- Protect Existing Investments: This is one of the key areas where you have to make sure that you choose the right provider for your hybrid cloud solutions. You want to be able to extend into the cloud all of the investment you’ve already made in infrastructure, virtualization, management, IT expertise and training, for both IT personnel and users.
- Accelerate Time to Value: There are areas where this may be relatively simple to measure: In test and development, for example, you can reduce the time and costs to develop new applications and services. Another area where time to value can make a big impact on cost savings is through critical applications, such as Web hosting or e-commerce, that will have the potential to perform faster and better through a more flexible environment, taking advantage of both premise-based solutions and public cloud services. Applications downtime and performance degradation can severely impact financial performance, particularly with so many aspects of today’s businesses centered on the Internet.
- Isolate, Pay for and Charge Appropriately for Usage: One of the benefits of any cloud environment is the creation of a service model that enables the IT department to pay for the resources it uses, while also charging internal departments for their usage. You don’t have to overprovision to adjust for business cycles; you can just use the resources you need when you need them. With the right hybrid cloud solution you can manage your workloads strategically and cost-efficiently so that you can move workloads between on-site and off-site environments as your requirements change.
These are just five areas in which hybrid cloud can lower TCO and where IT departments can make a strong business case for hybrid cloud deployments. What are some of the areas in your organization where hybrid cloud is impacting TCO? And what are some of the ways in which you apply metrics and measurements to those cost savings? Please let us know and remember to stay tuned for our next post.