BriefingsDirect by Dana Gardner
Showing results for 
Search instead for 
Do you mean 

Counting the cost of cloud

Dana Gardner (Dana_Gardner) on ‎07-18-2012 09:08 AM

This guest post comes courtesy of Chris Harding, Forum Director for SOA and Semantic Interoperability at The Open Group.

By Chris Harding

T costs were always a worry, but only an occasional one. Cloud computing has changed that.

Here's how it used to be. The New System was proposed. Costs were estimated, more or less accurately, for computing resources, staff increases, maintenance contracts, consultants and outsourcing. The battle was fought, the New System was approved, the checks were signed, and everyone could forget about costs for a while and concentrate on other issues, such as making the New System actually work.

One of the essential characteristics of cloud computing is "measured service." Resource usage is measured by the byte transmitted, the byte stored, and the millisecond of processing time. Charges are broken down by the hour, and billed by the month. This can change the way people take decisions.

"The New System is really popular. It's being used much more than expected."

"Hey, that's great!"

Then, you might then have heard,

"But this means we are running out of capacity. Performance is degrading. Users are starting to complain."

"There's no budget for an upgrade. The users will have to lump it."

Now the conversation goes down a slightly different path.

"Our monthly compute costs are twice what we budgeted."

"We can't afford that. You must do something!"

Possible and necessary

nd something will be done, either to tune the running of the system, or to pass the costs on to the users. Cloud computing is making professional day-to-day cost control of IT resource use both possible and necessary.

This starts at the planning stage. For a new cloud system, estimates should include models of how costs and revenue relate to usage. Approval is then based on an understanding of the returns on investment in likely usage scenarios. And the models form the basis of day-to-day cost control during the system's life.

Last year's Open Group “State of the Industry” cloud survey found that 55 percent of respondents thought that cloud return on investment (ROI) addressing business requirements in their organizations would be easy to evaluate and justify, but only 35 percent of respondents' organizations had mechanisms in place to do this. Clearly, the need for cost control based on an understanding of the return was not widely appreciated in the industry at that time.

We are repeating the survey this year. It will be very interesting to see whether the picture has changed.

Participation in the survey is still open. To add your experience and help improve industry understanding of the use of cloud computing, visit:

This guest post comes courtesy of Chris Harding, Forum Director for SOA and Semantic Interoperability at The Open Group. Copyright The Open Group and Interarbor Solutions, LLC, 2005-2012. All rights reserved.

You may also be interested in:


About the Author


Dana Gardner is president and principal analyst at Interarbor Solutions, an enterprise IT analysis, market research, and consulting firm. Gardner, a leading identifier of software and cloud productivity trends and new IT business growth opportunities, honed his skills and refined his insights as an industry analyst, pundit, and news editor covering the emerging software development and enterprise infrastructure arenas for the last 18 years. Gardner tracks and analyzes a critical set of enterprise software technologies and business development issues: Cloud computing, SOA, business process management, business intelligence, next-generation data centers, and application lifecycle optimization. His specific interests include Enterprise 2.0 and social media, cloud standards and security, as well as integrated marketing technologies and techniques. Gardner is a former senior analyst at Yankee Group and Aberdeen Group, and a former editor-at-large and founding online news editor at InfoWorld. He is a former news editor at IDG News Service, Digital News & Review, and Design News.

Leave a Comment

We encourage you to share your comments on this post. Comments are moderated and will be reviewed
and posted as promptly as possible during regular business hours

To ensure your comment is published, be sure to follow the Community Guidelines.

Be sure to enter a unique name. You can't reuse a name that's already in use.
Be sure to enter a unique email address. You can't reuse an email address that's already in use.
Type the characters you see in the picture above.Type the words you hear.
1-3 December 2015
Discover 2015 London
Discover 2015 in London, the ultimate showcase technology event for business and IT professionals to learn, connect, and grow.
Read more
November 2015
Software Online Expert Days
Join us online to talk directly with our Software experts.
Read more
View all