MISA Cloud Computing SIGEvaluating ROI & TCO of Cloud Computing InitiativesPrepared by: Bill Baldasti | bill@infusion.com | +1-416-524-8310April 11th, 2012 | Waterloo, ON

Agenda Types of Cloud Environments

Optimal Workload Patterns for the Cloud

ROI/TCO Measurements

It’s not just the Financials

Cloud vs. On-Prem Sample + Discussion

• Software as a Service (SaaS)

• Most Mature

• Examples: Salesforce.com, Dynamics CRM Online, SharePoint Online

• Platform as a Service (PaaS)

• Service & Management Layer of the Cloud Platform

• Example: Azure

• Infrastructure as a Service (IaaS)

• Foundational Layer of Cloud Computing, includes raw storage, compute, backup, disaster recovery, databases, security

• Example: Amazon Web Services

Types of Cloud Computing

Capex (or Capital Expenditure) is a business expense incurred to create future benefit i.e. acquisition of assets that will have a useful life beyond the tax year. e.g. expenditure on assets like building, hardware, or software.

Operational Expenditures (Opex) deal with the required day-to-day functioning of the business, like wages, utilities. Opex is the money the business spends in order to turn inventory into throughput.

Aside:Accounting Tutorial

Capex Opex

Accounting

Treatment

Cannot be fully deducted in the

period when they were

incurred. Tangible assets are

depreciated and intangible

assets are amortized over time.

Operating expenses are fully

deducted in the accounting

period during which they were

incurred.

• Cost savings to be realized by avoiding under provisioning and over provisioning

Capacity-Utilization Curve

Workload Patterns for Cloud Computing:Optimizing Costs to embrace these Patterns

Measuring ROI across Categories

Source: The OpenGroup – Building Return on Investment from Cloud Computing

Cloud ROI Cost Savings Models

Source: The OpenGroup – Building Return on Investment from Cloud Computing

1. Resource Availability– Free up critical resources for strategic work

2. Cloud can require less Professional Services

– As cloud matures, it could lower costs required for SI, hardware and/or infrastructure services

• Impact on SDLC

– Budgeting for performance tuning can impact financials in addition to QoS

Additional Value adds / ROI

• The Obvious Stuff

– Hardware

– Networking Infrastructure & Bandwidth

– Software Licensing Costs

• Others to consider

– Professional Services fees: Setup, Support, Integration

– Power Costs

– Hardware Warranty Costs

– Financing Costs

– Helpdesk Costs

– Backups/AV/Patching/Updates

– Time to Market Costs

– etc.

Costs to Consider

• Physical Architecture:

– 3 node Farm: 2 front-end servers (HA), 1 Database

Sample:

Public Portal

Web Front End: Dell PowerEdge R410, 2x Intel CPU,

4GB Ram, 4x RAID 300GB

$5,485 CAD ea.

$10,970

Database Server: Dell PowerEdge R510, 2x CPU, 16GB

RAM, RAID,

$5,756 CAD ea.

$5,756

Other Costs:

• Server maintenance

• Network bandwidth

• Security Infrastructure Requirements

• Network Infrastructure Requirements