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Step #6 for successful cloud brokering: Monitor your bottom line

collinchau on ‎02-18-2014 03:00 AM - last edited on ‎02-25-2014 09:55 AM Alec_Wagner

IT projects should help you save money or help you make money. Accepting fiscal responsibility as a cloud service broker requires that you must first understand how much each cloud service costs to operate. You need a complete view into your IT asset utilization, including servers, storage networks and applications. Visibility into software license compliance is important too. Although the asset management cost of a cloud service is technically an operating expenditure, you need to manage the service as if you own the assets. With the meter running any time you turn on a service, examine why monitoring your bottom line is ever more critical today.


Cost transparency

You will need to know how much your cloud services cost to operate. Administrators must be able to look into the cloud environment and have a complete view of what IT assets are being used and how much, including servers, storage networks and applications. Managing software license compliance is one important aspect of this, in order to make sure there are enough Oracle licenses, for example, but also not too many.


For private cloud infrastructure, you will largely rely on capex calculations. But with public cloud services, the notion of asset management shifts into operating expenditures. The financial implications of this are that although these are not owned assets, you still need to manage them as such—and most importantly, any time you turn on a server or a load balancer in the cloud, the meter is running.


Ensure efficiency and agility

Having this kind of visibility ensures that internal cloud services are run economically compared with external cloud service providers. It also lets you assess the value you’re getting versus the money you’re spending.


In order to be an effective cloud service broker, IT needs to be able to offer the business a variety of cloud services at price points that meet its needs. For this reason, IT should be able to comparatively evaluate the range of options for external cloud services, such as purchasing on-demand versus reserving instances in advance and the costs and benefits of purchasing at different scales.


Cost recovery

Knowing how much cloud services cost allows IT to charge for consumption of IT virtualized and cloud resources based on actual usage. This billing and budget reconciliation is important to accurately reflect the fiscal reality of employing cloud services across the enterprise. Instituting chargeback and showback policies provide personalized cost control at the departmental or individual level, allowing them to assess the value of using certain cloud services.


Report progress

Of course, as with anything you manage, you will need to generate regular reports on how effectively you are managing the environment. Are you charging enough to recover costs?


Reporting should extend to the consumers of the services, department managers and IT Services Managers so they have a complete understanding of the subscribed services and charged amounts according to actual consumption.


Finally, you should consider connecting your IT asset management of the cloud services to corporate financial systems will bring cloud financial data to the larger enterprise supply chain.


Balancing the equation

The financial management of your cloud assets will require careful oversight of many variables. Find out how HP Cloud management provides IT asset management systems and tools that enable you to transform into a successful, agile and cost-effective cloud service broker. Visit www.hp.com/go/cloudmanagement.


--With written contribution by Andrew Wahl


Related links:

Step #1 for successful cloud brokering: Start with a strategic plan

Step #2 for successful cloud brokering: Plan for all types of services

Step #3 for successful cloud brokering: Automate common processes

Step #4 for successful cloud brokering: Manage service SLAs

Step #5 for successful cloud brokering: Protect service offerings

About the Author


Lending 20 years of IT market expertise across 5 continents, for defining moments as an innovation adoption change agent.

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