Tracking Cloud Costs a Continuing Challenge

Ann All

Some observers, including Chris Weitz, a director with Deloitte Consulting, believe cloud computing will become so ubiquitous it will, as IT Business Edge contributor Mike Vizard writes, "just melt[s] into the enterprise."


There's no question cloud computing is gaining traction within the enterprise, as Barry Sage writes on his blog, in coverage of the 2nd Cloud Circle Forum. Yet it is experiencing growing pains, with "corporate procurement ... cited on more than one occasion as a major blocker to the adoption of cloud," says Sage, adding that CIOs are having trouble explaining key cloud concepts to other C-level executives. This "inevitably reduces cloud initiatives to an exercise in IT cost reduction on a project by project basis and limits its inclusion in the business strategy, where its real potential for returns and benefits lie," says Sage.


Cost is a major driver for most enterprises using cloud computing or considering doing so. While I agree cost reduction shouldn't be the only reason companies adopt cloud computing, I think it's table stakes.


However, it's not as simple as it might seem to demonstrate savings. Your cloud savings mileage will vary, depending on your existing IT infrastructure, your reasons for using the cloud in the first place (storage, application development and testing, running commodity applications, etc.) and whether you use a private cloud, a public cloud or some combination of the two. (The latter scenario is the one most experts think will be most common for larger enterprises.)


The seemingly fixed and transparent cost structures of cloud providers like Amazon look attractive when compared to the sometimes-convoluted formulas for calculating internal IT costs. Several experts quoted in a article suggest that companies using private clouds will need to employ a chargeback model to accurately track cloud costs and ensure appropriate provisioning of cloud resources.


But will users being sold on the cloud's flexibility balk at the idea of chargeback? Perhaps not, if IT organizations can offer the kind of simple, self-service provisioning they can get from outside providers like Amazon. That appears to be the goal of several vendors mentioned in the article. VMWare is reportedly working to develop a product that would incorporate metering into self-service portals for cloud computing, and Intel described its custom-built portal for managing metering and self-service as part of a white paper discussing its internal use of the cloud. .

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