Justin Augat

Confused about Cloud TCO?

Blog Post created by Justin Augat Employee on Jan 28, 2015

Confused about Cloud TCO?

Expert insight and total cost of ownership differentiation between private, hybrid and public cloud offerings - and an invite to the HDS IT Economics Executive Forum in Cambridge, MA on February 25th.

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There is no question that in today's business and IT environment "cloud" is getting a lot of attention. And for good reason. Recent advances in cloud management, delivery capabilities, and procurement options are expanding what is possible for businesses of all sizes, industries, and geographies.

However, with all of the options and varieties of cloud available today - think management, ownership, access, geography, and many other characteristics - determining "best fit" from an economic standpoint for a specific organization can be a confusing and difficult exercise. But like any other major business decision, economic clarity is required to create a solid foundation for IT investments that best align to business objectives.

The challenge with cloud is that too few IT professionals have the time to research and fully grasp the economic principles to differentiate among various cloud options - this includes , private, hybrid, and public cloud options - to transform their IT architectures into highly efficient, reliable, cost saving and sustainable assets for their business.

That’s why HDS is partnering with CSC, a leading provider in enterprise cloud management solutions, to sponsor our upcoming HDS IT Economics Executive Forum in Cambridge, MA, on February 25th, click here to register.

The HDS IT Economics Executive Forum features David Merrill, Chief Economist at Hitachi Data Systems for storage, big data and cloud.


David Merrill, Chief Economist at Hitachi Data Systems

David specializes in predictive ROI and TCO methods for advanced storage architectures.  At this event, David will discuss the latest financial and economic methodologies and strategies to help business leaders gain economic clarity - leading to greater operational efficiency by better differentiating among private, public and hybrid cloud solutions.

As a sample of the discussion to be held at the HDS IT Economics Executive Forum, here is a brief excerpt from a recent interview I conducted with David:

What are the current market trends causing the most confusion to IT leaders?

There are several trends HDS is seeing in the marketplace. One of them is confusion about the subscription price of cloud (private or public) offerings, compared to the in-house or DIY approach to delivering IT services. We are seeing customers that implement and run very cost efficient environments, and they can do it better than the cloud. Other cases, cloud makes perfect sense for hosting some types of workloads. You have to determine your own sweet spot, and not get seduced by a low price. 


What are the most costly limitations driving IT to look at private and/or hybrid cloud solutions?

There are many risks (performance, security) that are perceived to exist with different cloud offerings. There is also a transformation for some workloads to move into the cloud. Many organizations cannot quantify the risks, or the migration time/effort/cost in making some of these decisions.


Is the perception of public cloud upfront pricing and the ability to spin up projects faster true? Why should IT look to private and/or hybrid cloud options?

There are real benefits to provisioning time and some of the resource pricing that is available in the cloud. We see disconnect between the subscription price of cloud offerings vs. the real or total cost of the offering. We have to apply a structured approach to look beyond the price, and include other costs such as on-boarding, transformation, potential risk, latency, usage patterns etc.  Customers that take a holistic view of current costs, and then compare them to cloud total costs (not just the subscription), are able to make better decisions and enable IT efficiency.


How do converged infrastructure solutions enable big cost savings?

When we compare to older, DIY VM environments, we tend to see significant cost differences in:

          • Engineering, certification and change management costs
          • Time to market, or time to provision (self provision) resources
          • Total frame and blade reductions, contributing to significant environmental costs
          • End-to-end management with advanced orchestration software.

Ultimately, much of the labor effort is reduced, and the workload that was once distributed can be consolidation and unified. This can translate into significant savings

This event (like previous events) will help provide a framework for economic clarity and enable IT leaders to learn, share, and plan for their existing and upcoming cloud strategies for FY15. Please join us!