Cloud IT can justifiably be called a decisive IT trend of the decade. As the service has evolved since its inception, the supply has become more complex. As good and convenient as it is to develop infrastructure in the cloud, it is also dangerous because costs may suddenly soar. Recently, we have read an article in Business Insider confirming this theorem. Brian Moynihan, CEO of Bank of America, reports an annual $ 2 billion in infrastructure savings by building their own cloud instead of that of Amazon and Microsoft. This is a huge number even when compared to the bank’s nearly 25 billion in annual profits and 10 billion in IT budgets.
So Bank of America did not reject cloud technology itself, but chose a private cloud solution instead of the leading providers, moreover, they did not commit themselves to their own cloud forever. However, the project showed that they were able to set up their own infrastructure at a 20-30 percent lower cost than the provider offers (which certainly offered a significant discount to an organization of this size compared to their list prices). Yet, the operating costs of a major US bank are certainly not low in worldwide comparison. All this can even provide a great bargain position for the bank in the future.
Of course, Bank of America’s experience is not unique. The International Business Software Managers Association (IBSMA) hosted its 16th SAM Summit in October, where professionals also made strong statements such as “we are wasting too much money on the cloud”! Several speakers have pointed out that, on average, 35% of users’ cloud costs are lost due to a number of factors, including complex pricing models by service providers, limited control over purchasing, and the continual emergence of related services.
That’s why it’s important to pay close attention to cloud services, just like any other software use. Almost every organization comes to a time when the basic question arises: Is it worth choosing the cloud at all? Is software as a service so much more affordable as software vendors and cloud providers suggest? Will the cloud increase our exposure to vendors, or is there a way back if we change our minds?
Realistically, “go/no-go” is just a matter of proportions and timing: rarely can the cloud be completely avoided. Which, however, cannot be questioned: careful preparation is very important! And this is what makes proactive software management a must before, during, and in the cloud. From time to time, the actual cost of cloud services should be reviewed. Is it still worth it? Does today’s configuration (with new features and services enabled since the transition) have a better TCO than holding the infrastructure on our own premises?
Caution pays off: Software as a Service is not all-powerful, not always better! You can make an informed decision by continually measuring all the potential costs of the alternatives, weighing the benefits and pricing of the service providers, and comparing them to the costs of on-premise solutions. And if all looks beautiful, long live the cloud!