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Every CIO has heard about the Cloud by now – computing services provided by a vendor that your company can lease and access via the Internet. All of the articles sure seem to indicate that moving enterprise applications into the cloud makes good economic sense and can enhance the importance of information technology to the company. However, before you make the leap, you need to do some planning so that you are able to avoid the dreaded “cloud stall”…
The Real Cost Of Moving To The Cloud
If you were to read one of the many articles that has been published recently on the benefits of moving your IT shop into the cloud, then you might believe that you’ll save a lot of money. The real answer to this question is actually, like most things in life, just a bit more difficult.
“Cloud stall” is what can happen when a CIO decides to move some or all of the IT shop’s enterprise applications into the cloud only to discover that he or she has not properly budgeted for this project. In the case of the cloud, it can be very easy to focus your cost estimates on just exactly how much it is going to cost you to spin up virtual machines: starting costs and monthly costs. It turns out that there are a number of additional costs that have to be accounted for.
In the case of moving to the cloud, the person with the CIO job also has to take into account infrastructure costs. These can include such things as security, storage, and networking. CIOs who have made the move into the cloud recommend that for every $1 that you plan on spending on virtual machines, you budget another $11-$12 to spend on infrastructure costs to support that virtual machine. Accounting for these additional costs will prevent the project from running out of money before it is done.
The New Role Of IT In A Cloud World
In addition to transforming where a company’s applications run, a move into the cloud will also transform how the IT department is run. Many of the tasks that the IT team is currently doing will no longer have to be done. Likewise, there will be new sets of tasks that will now have to be performed.
All too often CIOs think that by moving their IT shop into the cloud they’ll be able to downsize or even eliminate their IT department. The reality is quite different. What is actually going to happen is that the focus of the IT department is going to change from just maintaining a set of boxes to monitoring how the entire IT infrastructure is operating.
Once you’ve moved into the cloud, your IT teams will have to adjust to the new reality. This means that they’ll be spending their time keeping the company’s networks up and running, security services up-to-date, and performing any integration that will be required
It will be the integrating of various enterprise applications that will probably occupy a great deal of your IT department’s time as you move forward. With a little luck the cloud service provider that you have selected may be able to help. If they have the tools that you will need, the application integration tasks may become easier for your team to perform.
What All Of This Means For You
Cloud computing has arrived and everyone in the CIO position has an obligation to evaluate the value of using the cloud for their IT department. The cost savings are undeniable; however, a great deal of planning needs to go into any move into the cloud in order to avoid having a “cloud stall”.
Moving to the cloud will save the company money over time. However, CIOs need to realize that there will be expenses associated with making the move. For every $1 of cloud based virtual machine that will be used, CIOs should count on $11-$12 in associated infrastructure costs. Once the move to the cloud has occurred, the IT department’s roles and responsibilities will change. The new focus will be on integration, security, and keeping networks up.
The good news about moving your enterprise applications to the cloud is that the company is going to save on both IT infrastructure expenses as well as staffing. Plan your move to make sure that you have your cloud based expenses and new IT roles mapped out and you’ll be able to avoid having a cloud based stall in your IT department!
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™
Question For You: What will be the best way to identifiy the new tasks that you’re IT department will have to perform in a cloud world?
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What We’ll Be Talking About Next Time
Once upon a time, offshoring was the answer to every CIOs dreams. It offered a great way to significantly grow the IT department while at the same time reducing the total costs of running the department. What make it even better was that somebody else had to deal with the real-world issues of managing people and the person with the CIO job could just focus on results. However, that magic never seemed to work out. CIOs are only now starting to learn to deal with reality of life after the death of offshoring…