Paying for Private Cloud Computing

Michael Vizard

Perhaps the biggest challenge facing senior IT directors is how to pay for the reinvention of their enterprise IT operations as a private cloud computing service. After all, when 75 percent of the IT budget goes towards maintenance fees and existing operations, finding the money to fund new projects ranges from difficult to impossible.

In fact, Jim Ganthier, vice president of marketing for industry standard servers for Hewlett-Packard, refers to this challenge as nothing short of "IT innovation gridlock." Unless IT organizations can find the funds to adopt the new types of systems needed to deploy a private cloud computing environment, IT will never really be managed as a true service.

Hewlett-Packard wants to help customers take on this challenge with new services that help IT organizations self-fund the transition to private cloud computing at a time when IT leaders are under pressure to innovate without increasing costs.

A research survey of more than 400 business and senior IT executives conducted by Coleman Parkes Research on behalf of HP found that one out two senior IT executives feel their company is being held back in terms of business process innovation because the majority of the IT budget was being consumed to support existing operations. The study also concludes that 95 percent of the executives survyeed said this inability to innovate had resulted in lost opportunities for the company; while 93 percent said it resulted in lost effort for the company; and 99 percent said it resulted in lost time.

Sine time and effort equals money and cost, HP thinks now is the time to roll out new cloud computing migration services while also enhancing the management functionality embedded in its Proliant G7 servers. HP is upgrading the Integrated Lights-Out (ILO) processor that the company embedds in its servers in order to add additional monitoring along with power and cooling management capabilities. The overall idea, said Ganthier, is for G7 servers to be able to pay for themselves within two months by reducing ongoing operational costs, which in turn can be used to help fund the adoption of newer technologies needed to create private cloud computing platforms.

The new services that HP wants customers to buy to help facilitate this transition include a Cloud Service Automation (CSA) offering that automates many IT processes, assessment tools for managing virtual server environments, and a variety of financial management tools designed specifically for IT organizations.

Whether IT organizations opt to lean on HP or some other vendor to make the transition to private cloud computing is up to each individual organization. But what is clear is that IT organizations are being required to modernize the way they manage IT resources in this era of the cloud. So the real question seems to be whether they are going to do it themselves; or leave the task to their eventual successor.

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