softchoice discovery series: cloud cost governance
TRANSCRIPT
Cloud Cost Governance
Avoiding the Unexpected Costs of Cloud Computing
Your Presenters
Aaron BrooksDirector of Hybrid [email protected]://ca.linkedin.com/in/aaron-brooks-03b3068
Craig McQueenMicrosoft Practice [email protected]://ca.linkedin.com/in/craigmcqueen
Today’s Objective
To provide some immediate next steps for you to improve cloud cost governance.
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Agenda
1. What do we mean by Cloud?2. Drivers & Barriers3. Financial Challenges 4. Overcoming Challenges5. Self Assessment 6. Q&A
What do we mean by Cloud?
Cloud Platforms Providers?
Public Cloud Spending Is Up and Growing
Cloud Drivers
Agility
Simplification
Optimization
• Speed to Deploy• Choice of Consumption Model• Access to Latest Features and Versions
• Improved Maintenance and Support• Manage Cost/Risk• Avoid Aged Infrastructure
• Applications• Data• Integration
Financial Barriers
Budget
Accountability
• Utility Model: OpEx vs. CapEx• Many ways to deliver applications (SaaS,
IaaS, PaaS)• Price is always changing
• Changing Business Requirements• Insight into Over and Under utilized
resources• Skills and Resources
• Provisioning • Alignment between IT, LoB and Finance• Cost allocation (Business and Services)
Optimization
Time
Customer ExperienceManage RiskBusiness Impact
CloudAdoption
The Cloud Challenge
TradIT
Biz
Time
Customer ExperienceManage RiskBusiness Impact
CloudAdoption
The Cloud Challenge
TradIT
Biz
Customer ExperienceManage RiskBusiness Impact
CloudAdoption
Time
No plan• Pilots• 3-5 yrs
The Cloud Challenge
Time
TradIT
No plan DIY
> 30% Fail• Pilots• 3-5 yrs
Biz • Skills gap
Manage $• No control
Customer ExperienceManage RiskBusiness Impact
CloudAdoption
The Cloud Challenge
TradIT
Biz
Time
No plan DIY
> 30% Fail• Pilots• 3-5 yrs
• Skills gap
Manage $• No control
Customer ExperienceManage RiskBusiness Impact
CloudAdoption
The Cloud Challenge
TradIT
Biz
Time
No plan DIY
> 30% Fail• Pilots• 3-5 yrs
• Skills gap
Manage $• No control
Customer ExperienceManage RiskBusiness Impact
CloudAdoption
The Cloud Challenge
Softchoice Cloud Readiness Study – 2016
Don’t understand implications of CapEx vs. OpEx spending
45%
Softchoice Cloud Readiness Study – 2016
Struggle to hold lines of business accountable for cloud costs
44%
Softchoice Cloud Readiness Study – 2016
Lack tools to track cloud spending
42%
Softchoice Cloud Readiness Study – 2016
Have exceeded cloud spends 57%
Time
Spen
d Budget
Actual
Clients end up spending more than twice as much as budgeted when governance measures not in place.
Key Challenges:• Budget• Accountability• Optimization
What We’ve Seen With Our Customers
Budget – Characteristics
Traditional Public Cloud
Time
Dem
and
Series1
0
20
40
60
80
100
120
Provision for Peaks
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Unoptimized Budget
Provision for Usage
Burst to support demand
Optimized Budget
Time
Dem
and
Series1
0
20
40
60
80
100
120$$$
Plan Your Public Cloud Spend Properly
Optimized Cloud BudgetTraditional Budget
• Planned for peaks• Over provisioned• Purchasing direct
• Plan for performance• Right size Infrastructure• Automation
• Four year useful life assumed for on-premise hardware• Burdened at approx. 30% for environmental, space and maintenance • Over Provision and Under Utilized • Downtime for maintenance and feature upgrades
• Costs Historically decrease 10% year over year• Reduced downtime for upgrades and maintenance • No assets• No Maintenance or Break-Fix costs
Budget Influencers When Thinking Cloud
Public Cloud
Traditional IT
What to Do…
Applications Assessment Contingency Get Started
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Accountability – Characteristics
• Application use to accountability typically clear – can map 1:1
• Can strive to shared costs if services are used by more than one LOB
• Clear procurement/provisioning rules
• Without strategy, difficult to detail cost allocation
• With strategy, full/partial cost allocation is easy
• Close tie of revenue and cost• Open provisioning leads to escalated
costs
Traditional Public Cloud
Determine Accountability
Line of Business
Finance
IT
How do I want to measure my costs?
Customer Department Project
Procurement
Procurement• Users • Applications• Infrastructure• Platform Services
• Process Controls• Technical Controls• Auditing
What? Scope? How?
Governance Workshop
Availability
Business value
Business priority
Who makes
decisions
Why it’s there
Who pays the bill
Deployment
Identifier
…Deployme
nt Owner Purpose Steward
Priority Net Benefit Operation
sActive Directory IT Security CIO Critical Productivity of end users 24x7
Web Site Marketing Public information and branding CFO Critical Demand Generation 24x7
CRM Sales Manage our Customers Sales VP Normal Client Relationships 9x5
Optimize – Characteristics
• Resources fixed• Scaling is slow and costly• Limited ability to optimize costs due to
CapEx Investment• Optimization comes by way of refresh• Insight focused on performance vs.
spend/cost
• New Tools Required to measure:• Spend• Performance• Usage
• Ongoing Optimization and right sizing• Leveraging PaaS and App Modernization
Traditional Public Cloud
Forecast to Your Budget
• Set a Budget• Tools to measure in real time• Alert before you overspend
Track Spend & Allocate Costs
• Leverage Catalog• Track Against Outcomes• Give Visibility to Stakeholders• Update Financial Processes
Optimize Cloud Environment
• Measure Performance • Report on Usage• SLA• Right Size • Automation• Platform Services
Breaking Through The Barriers
Budget
Accountability
Optimize
• Tool Based Budgeting• Forecast to Budget
• Governance Workshop• Track Spend• Allocate Costs
• Measure Performance• Understand Usage• Right Size / Automate
Challenge Solution
Two dimensions of Cloud Success
Speed of Adoption Managing Governance
The Adoption –Governance Model
Realize business benefits sooner
Competitors take market share
No accountability to Cloud spend
Optimal control over Cloud
spendGovernance
Adoption
Exercise 1Calculate the extend and speed of your organization’s cloud adoption.
SELF-ASSESSMENT
Exercise 2Calculate the extent to which your organization can govern and manage cloud costs.
SELF-ASSESSMENT
SELF-ASSESSMENT: Plot Your Scores
44-50
36-43
28-35
20-27
12-19
5-11
5-11 12-19 20-27 28-35 36-43 44-50
SELF-ASSESSMENT: Interpreting Your Results
Hesitant Cautious
Cowboy Leader
Governance
Adoption
SELF-ASSESSMENT: Strengths vs. Opportunities
Hesitant Cautious
Cowboy Leader
Adoption
Governance
Speed and AgilityRun Governance Workshop
Invest in Tools to Gain Insight
StrengthsOpportunities Balanced
Continuous ImprovementAutomation and Modernization
Positioned for ExecutionAnalyze Workloads to Create Budget
Get Started with Production App
Minimized RiskRight Size and Optimize
Create Roadmap for Adopting Cloud
Recommendations: Tools & Services to Drive Improvement
• Cloud TechCheck• Workload AnalyzerHesitant
• Jumpstart• Vendor-funded initiativesCautious
• Governance Workshop• Customized ConsultingCowboy
• Keystone• Softchoice Cloud DashboardLeader
Thank You! Contact us today. 1.800.268.7638 | www.softchoice.com