Cloud Cost Governance

Avoiding the Unexpected Costs of Cloud Computing

Your Presenters

Aaron BrooksDirector of Hybrid ITAaron.Brooks@softchoice.comhttps://ca.linkedin.com/in/aaron-brooks-03b3068

Craig McQueenMicrosoft Practice DirectorCraig.McQueen@softchoice.comhttps://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