When the cloud won t save you money (and why that s OK)

When the cloud won t save you money (and why that s OK)

When the cloud won t save you money (and why that s OK) Somewhere along the line, cost savings became synonymous with cloud computing. It s true that moving to dynamically priced or pay-as-you-go payment models often acts as an immediate cost-reduction lever on total IT spend. This has become a fairly common expectation. Indeed, 88% of 1,300 organisations recently surveyed by the Manchester Business School reported direct cost savings as a consequence of adopting cloud services. But these kinds of quick wins don t always materialise and it can be dangerous to expect them to. Cost savings are not guaranteed, and there are some common pitfalls that organisations expose themselves to, particularly during the migration period, that quickly eat up any short term gains. Perhaps more importantly though, to regard cost-savings as the central purpose of cloud computing disregards more significant benefits namely, the ways it can help you grow your business. Consequently, it s also useful to know when the cloud won t save you money, and why, sometimes, that s OK. 2...88% of 1,300 organisations recently surveyed reported direct cost savings as a consequence of adopting cloud services

When you aren t ready to move Misplaced urgency is one of the largest causes of undue cost during cloud migrations. This is not to say that getting prepared is necessarily a lengthy process. Instead it s that the anticipated cost savings of prospective cloud solutions often overshadow important preliminary steps. There are self-audit and discovery processes that costsavings depend on. For instance, poor visibility of your IT environment prior to migration will almost certainly result in worse visibility (and more complexity) afterwards. Visibility is important it s not necessarily the resources themselves that are cheaper, but rather their transparent measurement and alignment of usage to actual business need that produces savings. Consequently, poor visibility of usage patterns and workloads could easily result in increased spend. Similarly, testing and proof of concept stages are crucial to establishing readiness. Testing is one of the best ways to establish a migration strategy. Pick a system and/or collection of data that is non-essential to the business, with low levels of complexity and simple security requirements, and move that first. It ll establish the method, and provide a risk-free indication of how your destination environment compares to your current one. 3...poor visibility of your IT environment prior to migration will almost certainly result in worse visibility (and more complexity) afterwards

When you don t move quickly enough Conversely, many larger organisations have spent years stuck in the planning phase of mass-migration projects which attempt to move multiple systems to the cloud simultaneously. These all-encompassing projects inevitably drown in complexity, and are either abandoned or hastily executed once the cost of delay is realised. In either case, a staggered, strategic approach is easier to manage; success is more easily measured and effective processes are much more visible, making them simple to document and repeat. 4...a staggered, strategic approach is easier to manage

When you move the wrong things Another facet of using hosted resources is the increased strategy with which you re able to approach resource provision. When outsourcing infrastructure, it s very easy to spin up variously powerful environments and virtual machines suited to performing specific tasks. Consequently, segregating tasks, workflows and, in the case of storage, data and applications according to their operational needs is key to using resources as efficiently as possible. For instance, moving low-availability, business-asusual services into a high-performance storage environment will underutilise the hardware itself at a significant cost. This segregation also relates to the levels of uptime they require. The difference in cost between 99.99% and 99.999% availability is considerable, and organisations should be wary of over-prescribing that kind of uptime for non-critical data and applications. 5...the difference in cost between 99.99% and 99.999% availability is considerable

When your goals aren t specific enough The pursuit of unspecific goals can put cloud deployments at serious risk. First, if the business benefits are not clearly and specifically defined prior to the project, it s likely that any emerging business value will go unreported, increasing the perceived cost to the business, regardless of the actual benefits. Secondly, vague goals such as we want to increase the performance of our IT environment are not only difficult to transparently report on, they suggest no clear finish line. Projects without scientific objectives are both doomed to fall short of idealistic expectations and liable to get stuck in testing limbo, their prospective ROI eaten up by attempting continuous incremental improvements. Consequently, the most effective way to measure and realise these short-term gains is to frame the savings within specific business outcomes. Are you hoping to lower your support and maintenance costs? Increase uptime and availability? Avoid hardware spend? Reposition your technical team? Decrease your time-to-market? Whatever they are, build the environment around them and procure the resources that are going to help you achieve them. It s impossible to accurately allocate resources to a goal which doesn t have clear terms, and the time and cost spent rectifying that oversight will all diminish any projected savings. 6...it s impossible to accurately allocate resources to a goal which doesn t have clear terms

When the point of the move wasn t to save money All of this advice is general good practice for those wishing to see immediate, short term gains from their move to cloud based services. However, many of these short-term savings pale in comparison to the longer, more strategic impact that moving to a cloud platform can have on the business. In fact, some might go as far to say that cost-savings are entirely the wrong metric by which to judge the success of a cloud deployment, opting instead for value-delivered. It s rare that organisations actually reduce their IT usage after migrating most end up consuming more due to growth and highly-efficient utilisation rates. It is this ability to grow the business that should be the framing factor when considering cloud resources. Increased business agility when responding to new opportunities and more reliable levels of service enable a much faster development cycle and a drastically reduced time-to-market. Indeed, repositioning resources previously dedicated to operational aspects of the business is one of the primary methods of generating efficiencies using cloud services. Yes, some processes are automated or made faster and easier to complete, but it is the net reduction in management complexity that often produces the greatest savings. Rather than down sizing to make a quick buck, forward-thinking organisations would do well to reinvest these new-found resources in activities that support and grow the business. 7... cost-savings are entirely the wrong metric by which to judge the success of a cloud deployment

Databarracks Arxcis House 9 Park Hill London SW4 9NS t: +44 (0) 800 033 6633 e: info@databarracks.com www.databarracks.com www.databarracks.com Databarracks provides the most secure and supported cloud services in the UK. In 2003, we launched one of the world s first true managed backup services to bring indestructible resilience to mission critical data. Since then we ve developed a suite of services built with superior technology, support and security at their core. Today, we deliver Infrastructure as a Service, Disaster Recovery as a Service and Backup as a Service from some of the most secure data centres in the world, 30 metres below ground in ex-military nuclear bunkers. We back this up with unbeatable support from our team of handpicked experts. There s no such thing as above and beyond for our engineers because they only work to one standard: to keep your systems running perfectly. Databarracks is certified by the Cloud Industry Forum, ISO 27001 certified for Information Security and has been selected as a provider to the G-Cloud framework.