Cloud Wars: Friendly Fire – Part 2

December 19, 2011 by Pat O'Day

It's important to know that while the challenges I listed in Cloud Wars: Friendly Fire – Part 1 are very real, the core IT department is behaving that way for some very good reasons. They are struggling with not only the transition to cloud, mobile devices, big data, SaaS and social media but also with trying to do so while under a lot of duress due to economy-driven budget and headcount cuts. Being the sole caretakers of so many diverse mission critical technologies, applications and data in the company is not an easy task. In fact, some groups within core IT are running into challenges in their own department in an attempt to begin leveraging public cloud resources.

Let's look at a couple reactions you might hear from the IT department and some potential ways to address them…

"IT has capacity internally already, why can't you use that?"

If this is the reaction you recieve when you seek approval or get caught using cloud, IT will try to address your needs from an internal infrastructure standpoint and want to know how much memory, compute and storage you need. One of the main reasons you wanted to leverage cloud in the first place was so you didn't have to know what you needed, because you could only pay for what you used. This is a wildly foreign concept in most IT organizations that are accustomed to doing a lot of work to determine your resource needs. This process can often take several weeks if not months. They need to gauge not only your initial requirements when the project starts, but also how much it will grow over time because they have to buying enough hardware and software for the three years over which accounting requires them to depreciate the assets. They may also have to determine if they need to hire additional people. What kills it here is that your $1000 a month idea suddenly becomes a $250,000 or a Million dollar major project. If you tell them that your starting budget is only $1000, they will wonder why you are  wasting their time and move on. Note that IT will come back at some point if and when your project is successful and the dollars become more "real" from their perspective. Transparency is a good approach even though it may seem challenging and if you have the time, it is a better long term play. Bypassing IT or being allowed to try cloud under the guise of a pilot project shouldn't be considered lasting lasting approval.  

"Cloud is more expensive!"

More efficient cost is one of the biggest advantages of cloud computing. When comparing the cost of cloud computing infrastructure to traditional IT costs, the IT organization typically won't include the cost of people and operations management because those costs are hard to scope down to a specific department or application. Recurring costs like these are frequently spread across all lines of business in some form of allocation. This means marketing is paying for Oracle support whether they use Oracle or not. This is why it makes sense to get ahead of the total cost of ownership (cloud TCO) discussion. To do that, take the capital cost they are showing to you and add to that the entire cost of IT that was allocated against your business unit in the budgeting process. I'm pretty sure that will make this a big number. Now compare that to the cloud costs. If you have multiple applications in your business unit or if you use the general IT services like e-mail, you may have to factor those out somehow, but it will likely still be a big number. Now you have the basics to dig into a real TCO discussion and comparison. The good news is that this is going to be much more painful for them than it will be for you. You can simply bring your bill to the meeting, or if you haven’t made the leap yet, bring some vendor quotes.   Top cloud computing providers will have already broken down your cost and have line items like this:

RAM    $320

CPU  $150

Storage Tier 1 $400

Storage Tier 2 $202

Internet $50

Managed Firewall Service $125


We provide our VMware Cloud customers a free tool called Bluelock Portfolio. Portfolio breaks cost down by application, component, or even by business unit.

Bluelock Portfolio

IT generally also thinks in terms of fixed not dynamic capacity. As shown below, the red area represents fixed cost that you pay for whether you are using it or not. In the cloud, you only pay for what you need and that red area can either result in savings or be used for additional projects.

Cloud versus traditional spending

 IT as a Service (ITaaS)

This may seem like an oxymoron and it is one of the biggest challenges for traditional IT departments as they evolve in the cloud era. IT traditionally determines their priorities, and therefore where your support ticket or your project request fits into their queue, based on overall organizational priorities. That would seem to make a great deal of sense. The challenge is that IT is generally highly under-resourced and under a great deal of pressure to be more efficient so deferring smaller more tactical needs and department requests unfortunatley become a recurring byproduct of this approach. With cloud computing, your cloud computing provider is highly incentivized not only to deliver a good service becuase you are voting with your dollars every day or month when you pay your bill. They are also very eager to ensure your success because typically if you have a good experience you will not only stay, but if your project does well it will grow or earn your cloud provider the chance to do additional work for you and grow their own revenue stream. In the future, IT may work this way as technologies like VMware Chargeback and Showback become more prevelant and the cost of IT becomes easier to understand. While this may take some time, you can use the cloud today and even share your experiences with IT to help them understand some examples on how they might evolve their service to better fit the business.

In the third and final chapter of Cloud Wars: Friendly Fire we'll cover the myths and challenges around security, private cloud and hybrid cloud.