|By John Treadway||
|May 3, 2013 03:45 AM EDT||
My favorite and least favorite question I get is the same – “Can you help me build a business case and ROI for cloud computing?”
Well, yes… and no. The issue is that cloud computing has such a massive impact on how IT is delivered that many of the metrics and KPIs that are typically used at many enterprises don’t capture it. I mean, how do you capture Agility – really?
In the past I have broken this down into 3 buckets. Yes, some people have more but these are the big three…
Agility is reducing cycle time from ideation to product (or system delivery) – incredibly difficult to measure given that it’s hard to do apples to apples when every product/project is unique. You can do this in terms of Agile methodology task points and the number of points per fixed timeframe sprint on average over time. Most IT shops do not really measure developer productivity in any way at the moment so it’s pretty hard to get the baseline let alone any changes. Agility, like developer productivity, is notoriously difficult to quantify. I have done some work on quantifying developer downtime and productivity, but Agility is almost something you have to take on faith. It’s the real win for cloud computing, no matter how else you slice it.
In a highly automated cloud environment with resource lifecycle management and open self-service on-demand provisioning, the impetus for long-term hoarding of resources is eliminated. Reclamation of resources, only using what you need today because it’s like water (cheap and readily available), coupled with moving dev/test tasks to public clouds when at capacity (see Agility above) can reduce the dev/test infrastructure footprint radically (50% or more). Further, elimination of manual processes will reduce labor as an input to TCO for IT. In a smaller dev/test lab I know of, with only 600 VMs at any given time, 4 FTE onshore roles were converted to 2 FTE offshore resources.
There’s a very deep book on this topic that came out recently from Joe Weiman called Cloudonomics (www.cloudonomics.com). One of the key points is to be able to calculate the economics of a hybrid model where your base level requirements are met with a fixed infrastructure and your variable demand above the base is met with an elastic model. A key quote (paraphrase) “A utility model costs less even though it costs more.”
The book is based on this paper — http://joeweinman.com/Resources/Joe_Weinman_Inevitability_Of_Cloud.pdf
A hybrid model is the most cost-effective – which is “obvious” on the surface but now rigorously proven (?) by the math.
P = Peak. T = Time. U = the utility price premium.
If you add the utility pricing model in Joe Weiman’s work to some of the other levers I listed above, you get a set of interesting metrics here. Most IT shops will focus on this to provide the ROI only. They are the ones who are missing the key point on Agility. However, I do understand the project budgeting dance and if you can’t show an ROI that the CFO will bless, you might not get the budget unless the CEO is a true believer.
What is the impact of removing human error (though initially inserting systematic error until you work it through)? Many IT shops still provision security manually in their environments, and there are errors. How do you quantify the reputation risk of allowing an improperly secured resource be used to steal PII data? It’s millions or worse. You can quantify the labor savings (Efficiency above), but you can also show the reduction in operational risk in IT through improved audit performance and easier regulatory compliance certification. Again, this is all through automation.
IT needs to get on the bandwagon and understand the fundamental laws of nature here — for 50-80% of your work even in a regulated environment, a hybrid utility model is both acceptable (risk/regulation) and desirable (agility, economics, and quality).
Do a Study?
The only way to break all of this down financially is to do a Value Engineering study and use this to do the business case. You need to start with a process review from the outside (developer) in (IT) and the inside (IT) out (production systems). Show the elimination of all of the manual steps. Show the reduced resource footprint and related capex by eliminating hoarding behavior. Show reduced risk and lower costs by fully automating the provisioning of security in your environment. Show the “cloudonomics” of a hybrid model to offset peak demand and cyclicality or to eliminate or defer the expense of a new data center (that last VM with a marginal cost of $100 million anybody?).
In 1987 the stock market crashed and many trading floors could not trade because they lacked real-time position keeping systems. Traders went out and bought Sun workstations, installed Sybase databases, and built their own. They didn’t wait for IT to solve the problem – they did it themselves. That’s what happens with all new technology innovation.
The same thing happened with Salesforce.com. Sales teams just started using it and IT came in afterwards to integrate and customize it. It was obviously a good solution because people were risking IT’s displeasure by using it anyway.
If you really want to know if cloud computing really has any business value, take a look at your corporate credit card expenses and find out who in your organization is already using public clouds – with or without your permission. It’s time to stop calculating possible business value and start realizing actual business value from the cloud.
All organizations that did not originate this moment have a pre-existing culture as well as legacy technology and processes that can be more or less amenable to DevOps implementation. That organizational culture is influenced by the personalities and management styles of Executive Management, the wider culture in which the organization is situated, and the personalities of key team members at all levels of the organization. This culture and entrenched interests usually throw a wrench in the work...
Mar. 27, 2017 03:00 AM EDT Reads: 2,955
SYS-CON Events announced today that Outlyer, a monitoring service for DevOps and operations teams, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Outlyer is a monitoring service for DevOps and Operations teams running Cloud, SaaS, Microservices and IoT deployments. Designed for today's dynamic environments that need beyond cloud-scale monitoring, we make monitoring effortless so you ...
Mar. 27, 2017 02:15 AM EDT Reads: 4,133
Virtualization over the past years has become a key strategy for IT to acquire multi-tenancy, increase utilization, develop elasticity and improve security. And virtual machines (VMs) are quickly becoming a main vehicle for developing and deploying applications. The introduction of containers seems to be bringing another and perhaps overlapped solution for achieving the same above-mentioned benefits. Are a container and a virtual machine fundamentally the same or different? And how? Is one techn...
Mar. 27, 2017 01:45 AM EDT Reads: 2,946
My team embarked on building a data lake for our sales and marketing data to better understand customer journeys. This required building a hybrid data pipeline to connect our cloud CRM with the new Hadoop Data Lake. One challenge is that IT was not in a position to provide support until we proved value and marketing did not have the experience, so we embarked on the journey ourselves within the product marketing team for our line of business within Progress. In his session at @BigDataExpo, Sum...
Mar. 27, 2017 01:45 AM EDT Reads: 2,876
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor - all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...
Mar. 27, 2017 01:15 AM EDT Reads: 1,811
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
Mar. 27, 2017 12:45 AM EDT Reads: 2,007
What sort of WebRTC based applications can we expect to see over the next year and beyond? One way to predict development trends is to see what sorts of applications startups are building. In his session at @ThingsExpo, Arin Sime, founder of WebRTC.ventures, will discuss the current and likely future trends in WebRTC application development based on real requests for custom applications from real customers, as well as other public sources of information,
Mar. 27, 2017 12:30 AM EDT Reads: 825
China Unicom exhibit at the 19th International Cloud Expo, which took place at the Santa Clara Convention Center in Santa Clara, CA, in November 2016. China United Network Communications Group Co. Ltd ("China Unicom") was officially established in 2009 on the basis of the merger of former China Netcom and former China Unicom. China Unicom mainly operates a full range of telecommunications services including mobile broadband (GSM, WCDMA, LTE FDD, TD-LTE), fixed-line broadband, ICT, data communica...
Mar. 27, 2017 12:00 AM EDT Reads: 3,325
With the introduction of IoT and Smart Living in every aspect of our lives, one question has become relevant: What are the security implications? To answer this, first we have to look and explore the security models of the technologies that IoT is founded upon. In his session at @ThingsExpo, Nevi Kaja, a Research Engineer at Ford Motor Company, will discuss some of the security challenges of the IoT infrastructure and relate how these aspects impact Smart Living. The material will be delivered i...
Mar. 26, 2017 09:45 PM EDT Reads: 2,039
As software becomes more and more complex, we, as software developers, have been splitting up our code into smaller and smaller components. This is also true for the environment in which we run our code: going from bare metal, to VMs to the modern-day Cloud Native world of containers, schedulers and micro services. While we have figured out how to run containerized applications in the cloud using schedulers, we've yet to come up with a good solution to bridge the gap between getting your contain...
Mar. 26, 2017 09:45 PM EDT Reads: 7,573
Apache Hadoop is emerging as a distributed platform for handling large and fast incoming streams of data. Predictive maintenance, supply chain optimization, and Internet-of-Things analysis are examples where Hadoop provides the scalable storage, processing, and analytics platform to gain meaningful insights from granular data that is typically only valuable from a large-scale, aggregate view. One architecture useful for capturing and analyzing streaming data is the Lambda Architecture, represent...
Mar. 26, 2017 08:30 PM EDT Reads: 6,125
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningf...
Mar. 26, 2017 07:45 PM EDT Reads: 9,588
Your homes and cars can be automated and self-serviced. Why can't your storage? From simply asking questions to analyze and troubleshoot your infrastructure, to provisioning storage with snapshots, recovery and replication, your wildest sci-fi dream has come true. In his session at @DevOpsSummit at 20th Cloud Expo, Dan Florea, Director of Product Management at Tintri, will provide a ChatOps demo where you can talk to your storage and manage it from anywhere, through Slack and similar services ...
Mar. 26, 2017 06:45 PM EDT Reads: 4,265
SYS-CON Events announced today that Ocean9will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Ocean9 provides cloud services for Backup, Disaster Recovery (DRaaS) and instant Innovation, and redefines enterprise infrastructure with its cloud native subscription offerings for mission critical SAP workloads.
Mar. 26, 2017 06:30 PM EDT Reads: 2,049
The taxi industry never saw Uber coming. Startups are a threat to incumbents like never before, and a major enabler for startups is that they are instantly “cloud ready.” If innovation moves at the pace of IT, then your company is in trouble. Why? Because your data center will not keep up with frenetic pace AWS, Microsoft and Google are rolling out new capabilities In his session at 20th Cloud Expo, Don Browning, VP of Cloud Architecture at Turner, will posit that disruption is inevitable for c...
Mar. 26, 2017 05:00 PM EDT Reads: 2,141