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Softchoice Discovery Series: Cloud Cost Governance

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Avoiding the unexpected costs of cloud computing. Without proper planning and governance, spending on cloud services can easily get out of control, putting your organization at risk of not realizing the benefits of moving to the cloud in the first place. This presentation helps you understand the frameworks and tools available to effectively manage and optimize cloud costs.
You’ll Learn how to: (1) develop and manage optimal cloud budgets (2) assign accountabilities and track usage (3) continuously improve cost performance.

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Softchoice Discovery Series: Cloud Cost Governance

  1. 1. Cloud Cost Governance Avoiding the Unexpected Costs of Cloud Computing
  2. 2. Your Presenters Aaron Brooks Director of Hybrid IT Aaron.Brooks@softchoice.com https://ca.linkedin.com/in/aaron-brooks-03b3068 Craig McQueen Microsoft Practice Director Craig.McQueen@softchoice.com https://ca.linkedin.com/in/craigmcqueen
  3. 3. Today’s Objective To provide some immediate next steps for you to improve cloud cost governance. $$ $
  4. 4. Agenda 1. What do we mean by Cloud? 2. Drivers & Barriers 3. Financial Challenges 4. Overcoming Challenges 5. Self Assessment 6. Q&A
  5. 5. What do we mean by Cloud?
  6. 6. Cloud Platforms Providers?
  7. 7. Public Cloud Spending Is Up and Growing
  8. 8. 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
  9. 9. 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
  10. 10. Time Customer Experience Manage Risk Business Impact Cloud Adoption The Cloud Challenge
  11. 11. Trad IT Biz Time Customer Experience Manage Risk Business Impact Cloud Adoption The Cloud Challenge
  12. 12. Trad IT Biz Customer Experience Manage Risk Business Impact Cloud Adoption Time No plan • Pilots • 3-5 yrs The Cloud Challenge
  13. 13. Time Trad IT No plan DIY > 30% Fail • Pilots • 3-5 yrs Biz • Skills gap Manage $ • No control Customer Experience Manage Risk Business Impact Cloud Adoption The Cloud Challenge
  14. 14. Trad IT Biz Time No plan DIY > 30% Fail • Pilots • 3-5 yrs • Skills gap Manage $ • No control Customer Experience Manage Risk Business Impact Cloud Adoption The Cloud Challenge
  15. 15. Trad IT Biz Time No plan DIY > 30% Fail • Pilots • 3-5 yrs • Skills gap Manage $ • No control Customer Experience Manage Risk Business Impact Cloud Adoption The Cloud Challenge
  16. 16. Softchoice Cloud Readiness Study – 2016 Don’t understand implications of CapEx vs. OpEx spending 45%
  17. 17. Softchoice Cloud Readiness Study – 2016 Struggle to hold lines of business accountable for cloud costs 44%
  18. 18. Softchoice Cloud Readiness Study – 2016 Lack tools to track cloud spending 42%
  19. 19. Softchoice Cloud Readiness Study – 2016 Have exceeded cloud spends 57%
  20. 20. Time Spend 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
  21. 21. Budget – Characteristics • Capex • Fix costs impede or kill projects • Sunk Costs: Hard to pivot • 1-3 year planning cycle • IT owns technology budget • OpEx: Agility, can pivot projects • Consumption based model • Forecasting becomes critical • Variable Costs • LOBs can own some technology budget Traditional Public Cloud Traditional Public Cloud
  22. 22. Time Demand 0 20 40 60 80 100 120 Provision for Peaks $$$ Unoptimized Budget
  23. 23. Provision for Usage Burst to support demand Optimized Budget Time Demand 0 20 40 60 80 100 120 $$$
  24. 24. Plan Your Public Cloud Spend Properly Optimized Cloud BudgetTraditional Budget • Planned for peaks • Over provisioned • Purchasing direct • Plan for performance • Right size Infrastructure • Automation
  25. 25. • Four year useful life assumed for on-premise hardware • Burdened at approx. 30% for environmental, space and maintenance • Over Provision and Under Utilized • Downtime for maintenance and feature upgrades • Costs Historically decrease 10% year over year • Reduced downtime for upgrades and maintenance • No assets • No Maintenance or Break-Fix costs Budget Influencers When Thinking Cloud Public Cloud Traditional IT
  26. 26. What to Do… Applications Assessment Contingency Get Started $$ $
  27. 27. 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
  28. 28. Determine Accountability Line of Business Finance IT
  29. 29. How do I want to measure my costs? Customer Department Project
  30. 30. Procurement Procurement • Users • Applications • Infrastructure • Platform Services • Process Controls • Technical Controls • Auditing What? Scope? How?
  31. 31. Governance Workshop Availability Business value Business priority Who makes decisions Why it’s there Who pays the bill Deployment Identifier … Deployment Owner Purpose Steward Priority Net Benefit Operations Active 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
  32. 32. 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
  33. 33. Forecast to Your Budget • Set a Budget • Tools to measure in real time • Alert before you overspend
  34. 34. Track Spend & Allocate Costs • Leverage Catalog • Track Against Outcomes • Give Visibility to Stakeholders • Update Financial Processes
  35. 35. Optimize Cloud Environment • Measure Performance • Report on Usage • SLA • Right Size • Automation • Platform Services
  36. 36. 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
  37. 37. Two dimensions of Cloud Success Speed of Adoption Managing Governance
  38. 38. The Adoption –Governance Model Realize business benefits sooner Competitors take market share No accountability to Cloud spend Optimal control over Cloud spendGovernance Adoption
  39. 39. Exercise 1 Calculate the extend and speed of your organization’s cloud adoption. SELF-ASSESSMENT
  40. 40. Exercise 2 Calculate the extent to which your organization can govern and manage cloud costs. SELF-ASSESSMENT
  41. 41. 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
  42. 42. SELF-ASSESSMENT: Interpreting Your Results Hesitant Cautious Cowboy Leader Governance Adoption
  43. 43. SELF-ASSESSMENT: Strengths vs. Opportunities Hesitant Cautious Cowboy Leader Adoption Governance Speed and Agility Run Governance Workshop Invest in Tools to Gain Insight Strengths Opportunities Balanced Continuous Improvement Automation and Modernization Positioned for Execution Analyze Workloads to Create Budget Get Started with Production App Minimized Risk Right Size and Optimize Create Roadmap for Adopting Cloud
  44. 44. Recommendations: Tools & Services to Drive Improvement • Cloud TechCheck • Workload AnalyzerHesitant • Jumpstart • Vendor-funded initiativesCautious • Governance Workshop • Customized ConsultingCowboy • Keystone • Softchoice Cloud DashboardLeader
  45. 45. Thank You! Contact us today. 1.800.268.7638 | www.softchoice.com

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