Technology revelation: The real cost of cloud computing

For CIOs who don't believe in technology commitments, cloud computing is a wake-up call. Although the CIOs who have tasted "cloud" sweetness say their colleagues are skeptical of IT managers who claim to offer better and cheaper services.

Eric Dirst, a CIO at DeVry University, asked his team to truthfully report the company's real cost of it. "You have to think about it," he said. When we do a big deal, we calculate the cost of ten years ' ownership. We don't want to change the service for two or three years. ”

To compare real costs, you must cover the cost of the server and the cost of replacing the server, including system management, security patches, and disaster recovery. These are included in the monthly cost of cloud computing services. So far, DeVry has used SaaS applications in CRM,HR and messaging, deployed custom applications on saleforce.com force.com, and deployed customized utilities in Amazon Web Services (AWS).

Aquent CIO Larry Bolick thinks it's hard to make a direct comparison between cloud computing and internal it, saying: "This is not the same as upgrading the server, it doesn't have to be in the cloud." ”

Over the past two years, Aquent has transformed more than 30 of its North American offices into cloud-based telephony systems and moved its core business systems to the cloud. When converting a company's own ERP system into Web mode, aquent it from a traditional data center lease to an AWS custodian. The software now runs on three AWS Clouds-one in the United States, one in Ireland and one in Singapore-to increase transmission coverage.

James Staten, an analyst at Forrester Research, also argues that companies seem to have underestimated the cost of internal it. "In general, companies will only calculate overhead, not operating costs, so they will mistakenly assume that it is cheaper than the preset," he said. ”

Financial costs

Now, cloud computing is very popular in small and medium-sized enterprises. Large companies seem more conservative for security reasons. But as the servers reach their lifespan, CIOs will have to find a way to change them. Former CIO Michael Hugo said: "The cost of money will be the focus of the CFO's discussion." "The CFO may choose to replace the investment in IT equipment with the diversification costs of cloud computing." In addition to direct costs, the CFO also considers the opportunity cost of bundling funds with intrinsic assets such as servers.

To be precise, service providers invest in security as customers place great emphasis on the security of cloud services-while many companies are scaling back information security investments. "It's not honest to say that data is more secure on a server," says Hugo. ”

Many technical managers want to stop this change because they have a vested interest. CIOs have a keen eye for employee cost forecasts.

Hewlett-Packard Joe Weinman, the chief spokeswoman for HP's cloud computing, predicts the transition is gradual. He believes most of it will turn to the cloud for customers and small businesses. On the other hand, there is a great deal of system-management dogma in large enterprises-cloud providers can achieve better and larger businesses, but that is hard to convince.

For large enterprises, the public cloud architecture works in specific cases, such as when they can lease a large number of computers to quickly run a centralized operation in a short period of time.

Large enterprises can also use cloud services as a means of protection against the uncertainty of the rapid growth of new products. Weinman that when business grows, you can easily decide if you should continue to deploy the server. But if you pursue dogmatism, these fixed assets will hinder your development.

Hidden costs in the cloud

Dirst and Bolick agree that cloud computing may hide unexpected costs. Bolick said he found that if the service was to reach an acceptable level, the required cloud server would have a higher capacity than expected because he would be mistaken for a physical server.

Because the cloud server represents a subset of the virtual cache and processor resources in the server pool, its performance may not meet your expectations.

Bolick said: "If you do it again, I should design a larger cloud environment." Then, once the system is stable, its size can be reduced. Of course, one of the virtues of the cloud is that we can expand it quickly. "This will allow you to correct the performance in a few days.

When you move to the cloud, your old and new systems should run for several months at a time, and then you can see which one is more expensive.

Dirst that companies that have adopted service-oriented architecture regulations will occupy the advantage of cloud technology, and those that have not been adopted will fall behind. This includes staff training, middleware upgrades and so on.

Dirst admits to underestimating the management and monitoring costs associated with cloud applications. Because traditional enterprise management tools do not track cloud applications well, his department has to write its own routing monitoring script so that it can be detected when the cloud application stops working.

"This is more than we expected," says the

Dirst. "However, he believes that the ROI combined with faster transport capability is better in the cloud environment." This is true for SaaS applications, as SaaS applications add two to three new features each year. When the traditional software vendors release the new version, DeVry wait 3-6 months to be able to confidently launch.