By now, most people know the benefits of the cloud – elasticity, flexibility, scalability, on-demand resources. But how does moving from traditional on-premise IT infrastructure to the cloud affect your business financials? For a good overview, check out “The Financial Impact of Cloud.”
Wired Innovation Insights published a blog article written by our own Chris Nolan yesterday. Chris discusses ways you can save money on your AWS cloud deployment in “How to Manage Your Amazon Cloud Deployment to Save Money.” Chris’ top tips incude:
- Use CloudFormation or other configuration and orchestration tool.
- Watch out for cloud sprawl.
- Use AWS auto scaling.
- Turn the lights off when you leave the room.
- Use tools to monitor spend.
- Build in redundancy.
- Planning saves money.
The human factor of IT embracing the cloud must always be taken into consideration.
Cloud computing is causing IT to evolve from the back office to a catalyst for business transformation and company growth. When leaders such as the CIO communicate their desire to shift technology from on premise to the cloud, IT is generally scared to death. People fear change and the unknown. They immediately ask, “What does this mean for me?” “How will this impact my job?” These feelings can cause IT to see the cloud as a threat and resist the shift. Thus, the human factor of IT embracing the cloud must always be taken into consideration.
CIOs and other IT leaders must be clear with their teams on their desire to shift from leveraging technology on premise to the cloud and the why behind it. CIOs must understand that some people will jump onboard quickly; others will jump onboard over time; and some people will not want to work this way and will never jump onboard. As a consequence, IT leaders must commit to having a lot of conversations with team members to gain buy in. IT leaders must always be sincere and work to demonstrate understanding with their people; otherwise, they will do more harm than good.
For example, job security is often the top issue. If you are an Exchange administrator, you spend half the day ensuring email is working. What happens when the company moves to a hosted solution? The CIO can communicate the desire to allow iPhones and the need to learn mobile device management, which is far more interesting and valuable than watching email go across the server. The CIO could have a similar conversation with a system administrator moving into dev/ops (supporting stable software to enabling rapid deployment of stable software).
Smart providers know that the human factor of consuming cloud must always be taken into consideration, especially with IT departments at the start of their journey. While establishing a compelling business case – solution, ROI, payback, etc. – is table stakes, there is also often a need to arm IT leadership with the messaging and tools to help guide their teams through the change management process. That is, not losing their job, but doing a different job; shifting from undifferentiated work to high value activities. How the status quo is the real risk.
-Josh Lowry, West Coast GM
The other day I was working with my neighbor’s kid on his baseball fundamentals and I found myself repeating the phrase “Remember the Basics.” Over the course of the afternoon we played catch, worked on swinging the bat, and fielded grounders until our hands hurt. As the afternoon slipped into the evening hours, I started to see that baseball and my business have several similarities.
My business is Cloud Computing, and my company, 2nd Watch, is working to pioneer Cloud Adoption with Enterprise businesses. As we discover new ways of integrating systems, performing workloads, and running applications, it is important for us not to forget the fundamentals. One of the most basic elements of this is using the proper terminology. I’ve found that in many cases my customers, partners, and even my colleagues can have different meanings for many of the same terms. One example that comes up frequently is the difference between having a Highly Available infrastructure vs. Highly Reliable infrastructure. I want to bring special attention to these two terms and help to clearly define their meaning.
High Availability (HA) is based on designing and implementing systems that are proactively created to handle the operational capacity to meet their required performance. For example, within Cloud Computing we leverage tools like Elastic Load Balancing and Auto Scaling to automate the scaling of infrastructure to handle the variable demand for web sites. As traffic increases, servers are spun up to handle the load and vice versa as it decreases. If a user cannot access a website or it is deemed “unavailable,” then you risk the potential loss of readership, sales, or the attrition of customers.
On the other hand, Highly Reliable (HR) systems have to do with your Disaster Recovery (DR) model and how well you prepare for catastrophic events. In Cloud Computing, we design for failure because anything can happen at any time. Having a proper Disaster Recovery plan in place will enable your business to keep running if problems arise. Any company with sensitive IT operations should look into a proper DR strategy, which will support their company’s ability to be resilient in the event of failure. While a well-planned DR schema may cost you more money upfront, being able to support both your internal and external customers will pay off in spades if an event takes place that requires you to fail over.
In today’s business market it is important to take the assumptions out of our day-to-day conversations and make sure that we’re all on the same page. The difference between being Highly Available and Highly Reliable systems is a great example of this. By simply going back to the fundamentals, we can easily make sure that our expectations are met and our colleagues, partners, and clients understand both our spoken & written words.
-Blake Diers, Cloud Sales Executive
According to Gartner, while 42% of CIOs report to CFOs, 75% of CFOs are actively involved in making IT decisions for their companies. Successful selling then requires understanding how CFOs think about making business and financial decisions. Cloud computing is accelerating this need based on the shift from capital expense to operating expenses. Capital expenses (CapEx) are for assets with a useful life greater than one year. Operating expenses (OpEx) are incurred in the ordinary course of running the business on a monthly or yearly basis.
Why does the shift from CapEx to OpEx matter? Companies want to preserve cash. CapEx requires an upfront investment. OpEx allows you to pay on a monthly or years basis. For example, instead of making an upfront investment based on peak capacity for physical server infrastructure, customers can leverage AWS to match capacity to need, as well as pay as they go (monthly) for only the services that they use. The following is a summary of the key differences between CapEx and OpEx:
You can also try the TCO Calculator to see what kind of Capex savings your business could save by moving to the cloud.
-Josh Lowry, General Manager – West