cloud economics - toronto fsi symposium - october 2016

© 2016 Cloud Technology Partners, Inc. / Confidential 1

Cloud Economics

October 11, 2016

Stuart Robertson


• AWS Certified Solutions Architect

• Former Business Analyst with a history in

Private Equity

[email protected]

linkedin.com/in/stuartdrobertson

Introduction

Stuart Robertson

Manager, Global Alliances at CTP

mailto:[email protected]


Agenda

1. Start with the Why

2. How to build your economics analysis

3. What you should expect


Start with the ‘Why’

Biz

Case

Cloud Economics are Essential to the ‘Why’

1. CEOs / CFOs need to see a business

case!

2. Cloud economics are a key component

of that business case.

3. The business case will differ depending

on your why.

a. Eg - Data center shutdown vs agility


What Happens Without a Business Case?


Show of Hands….


Bad News...

How accurate is your CMDB?

This ‘quick and dirty’ estimate is only a fraction of the real cost.


Next Comes the ‘How’

There are a lot of things you need to consider

1. An economic analysis is not a ‘one size fits all’

type of model.

2. Different companies have different reasons for

moving to the cloud, and an economic analysis

should justify those reasons.

The complexity of a cloud economics calculation

depends on the needs of the business and the

decision context of the migration program.


Cost to ‘Run the Engine’

• Compute

• Network

• Storage

• Support

• Labor (training, new hires, etc)

Cloud Economic Analysis - Various Sizes

Pure TCO

TCO Plus

ROI


Holistic Business Impact

• Migration Costs

• Refactor Costs

• Operational Transformation Costs

• 3rd Party Tool Costs

• Software Costs (Aurora vs MSSQL)

• Value of increased redundancy

• Decreased provisioning time


Pure TCO

TCO Plus

ROI


Qualifying Qualitative Benefits

• Increase market share through

global distribution

• Releasing applications faster

• Recruitment value

• Increased BC/DR value to firm

• Increased security value to firm


Pure TCO

TCO Plus

ROI


Pure TCO

TCO Plus

ROIMost firms land somewhere

in the middle.

• A Pure TCO is not

defendable and is too

simplistic

• A full ROI is overkill



• Security / Compliance

• Scalability and Availability

• Global Distribution

Scoping the Economic Analysis

TCO /

ROI

Scope

• Application Inventory

• Data and Users

• Dependencies / Integration

• Cost Reduction / Allocation

• Critical Dates

• Agility and Scalability

• Organization

• Resources

• Schedule

• 3rd Parties

IT Estate

Strategic

Objectives

Architecture

Constraints

Planning

Constraints


Cloud Economics Development Process

Current State

Assessment

Future State

Architecture

Economic

Model

Business Case

/ ROI

Application

Inventory

Current State

Requirements

(encryption, BC/DR,

SLAs)

Application

Footprint

Operational

Transformation

Application BOM

and Softwares used

in the Cloud

Common Services

Qualitative /

Quantitative

Benefits

Executive

Presentation


• Compute, network, storage

• Server utilization

• Software versions

• Operational tools

Economic Analysis Starts with Understanding Your Deployment Architecture

• Rightsizing

• Uptime scheduling

• Environment reduction

• Defense in depth security

Current State Assessment Future State Architecture

40% Scheduled Uptime

30% Scheduled Uptime Autoscaling

StageProduction

TestTest

Test

Dev

TestTest

Dev

ProductionStage

DevDev

DevDev

Dev

DevDev

DevDev

DevDevDev

Dev


• Infrastructure costs on AWS

• Data transfer costs

• Software costs

• Operational tools

The End Goal of an Economic Analysis is the Business Case

• Agility savings

• Time to provision

• Increased security on AWS

• Recruitment value

Economic Model Business Case


Financial Management in the Cloud Business Office (CBO)

Client Engagement

Risk & Controls

Monitoring

Financial

Management

Third Party

Engagement

Product

Management

Service Catalog

Management

Demand

Management and

Decisions Support

Reporting End-User Feedback

Solicitation

Communications HR / Training

The CBO leads ongoing management of your public cloud environments.


5 Truths for Cloud Economics

1. Replicating what you have in your data center to the cloud will yield

nominal savings.

2. Typical data center average server utilization is under 15%.

Optimized cloud deployments achieve 75%+ utilization.

3. Securing your applications requires investing in cloud-aligned

security frameworks for defense in depth.

4. Developing full stack automation for agility is not cheap - but is

worth the cost.

5. Don’t underestimate the cost of organizational transformation.


What Our Experience Has Taught Us

40% Cost

Savings

Automation Change Management

Security, Governance,

and Compliance Migration

Software


Cloud EconomicsAre you getting the bigger picture?

cloudtp.com/doppler

More on this topic

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Contact

617.674.0874

[email protected]

www.cloudtp.com

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