Assessing TCO in the age of the cloud

Posted by Mike Vizard on Oct 18, 2016 10:03:00 AM

Cloud_TCO.jpgHistorically, there has been a fierce debate over what type of cloud computing model is most efficient. Every provider of a public cloud service or private cloud software claims their model is the most cost effective.

To provide some clarity around those competing claims, this week 451 Research released a Cloud Price Index (CPI) report that basically finds that everyone making such claims is right to one degree or another as long as levels of scale are taken into account. Specifically, the report finds that VMware and Microsoft currently offer a lower total cost ownership (TCO) in environments where there are fewer than 400 virtual machines. Above that mark, 451 Research says private clouds based on the OpenStack cloud management framework have a lower TCO.

In both cases, 451 Research says standing up a private cloud that needs to support more than 400 virtual machines in any form is less expensive over time than a public cloud service or a managed private cloud service.

Cloud needs change over time

Obviously, TCO mileage will vary considerably by IT organization. Public cloud service providers still enjoy two critical advantages. The cost of firing up a few virtual machines is generally low, and the amount of time it takes to get them deployed is several orders of magnitude less than what the typical internal IT operations team can accomplish on their own. Because of those issues, the rate at which application workloads are getting deployed on public clouds continues to increase.

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But just because an application workload may have been initially deployed on a public cloud, it does not follow that the application workload will stay there in perpetuity. Many IT organizations move application workloads back on premise once either the application workload scales to the point where it’s more cost effective to deploy it on premise or application performance requirements necessitate giving that workload its own dedicated infrastructure in a local data center.

Challenges and opportunities

As a result, enterprise IT now consists of multiple silos of cloud computing infrastructure. There may one day be a unified approach to managing all those clouds, but for the moment each cloud consists of an isolated stack of software that needs to be managed separately. That additional level of complexity is proving to be a major challenge for most IT organizations. The simple truth is that when it comes to managing any kind of cloud most enterprise IT organizations don’t have much depth of experience.

Naturally, that lack of cloud computing experience creates a massive amount of opportunity for IT service providers. Not only are there multiple clouds to service, as application workloads move between them significant data management challenges start to arise. Throw in security and compliance issues, and the rise of multi-cloud computing may be one of the best things to happen to IT service providers in recent memory.

The one thing IT service providers need to stay aware of, however, is the fact that when it comes to the cloud there’s no such thing as one solution that fits all available application workloads.

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Topics: Cloud Trends

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