This is the fourth and final part of this blog series on cloud service management.

We’ve written in the past about cloud service management but, in this final installment of our cloud management series, we’re talking about a strategy to ensure you are getting the most value from your providers’ service management activities, whilst simultaneously retaining a tight focus on your business’ own needs and the needs of your client – all while staying under budget, of course.

Sounds like magic, right? Well, so did the cloud a decade ago!

So how do we work this magic? How do we manage a cloud-based infrastructure environment (IaaS) in a way that allows us to benefit from the simplicity, scalability and quality of these services without cost and consumption blowouts?

First off, in order to achieve our multi-faceted goal, we need to go into battle. To win this battle, we need to understand who our enemies are. In this case, they are fourfold: Complexity, Transparency, Proliferation and Vested Interest. Let’s divide and conquer:

Complexity

Any CIO who has seen their latest IaaS bill can see that complexity of information and cost seem to rise at an equal rate: the more complex the information provided by the vendor, the less affordable it becomes, both in terms of costs and consumption.

A deliberate ploy by vendors? Possibly. The more likely answer is a bit less malicious: a legacy of the over complex management and billing systems developed by vendors and technical managers to manage over-complex ‘90s-style IT environments, now shoehorned to support more elegant cloud services environments.

So what does this mean when it comes to gaining understanding about how your provider’s offering adds value to your business? Well, that relates to…

Transparency

It’s fair to say that, in our business, usage is fluid, making consumption hard to track. If the number of instances is growing, capacity utilisation is opaque and service management billing is entirely divorced from the bill you are receiving, then how can you possibly understand and manage what you are paying for?

Say, for example, you turn off a server instance in the cloud. How can you be assured that the service provider immediately stops billing you for service management support? Short answer? You can’t.

Which leads us to…

Proliferation

To get an idea of how insidious this enemy can be, think back to the early 2000s. VMWare introduced its marvellous server consolidation product range, at which point most IT environments ended up with 10 times as many VMs as they had physical servers earlier on (thanks to the wise counsel of excellent sales teams, of course). It cost the customer more and, conveniently, increased the service providers’ profits.

Vendors argued that it was much more expensive to support a single VM instance than it was to simply build and operate a stand-alone server because they had to support VM software over and above the usual server OS and software.

In actuality, more effective management tools, greater stability, ease of restore and improved support functionality more than made up for the cost of the extra software layer.

In this case, support teams were the winners, getting away with charging clients for supporting an ever growing number of highly profitable VM instances. All this while having absolutely no incentive whatsoever to help clients manage the growth!

Sp, coming back to present day, what does this have to do with with IaaS? The short answer is everything. Vendors who support your IaaS, just like the old-school VMWare instance support teams, have absolutely no incentive to stop charging high prices for an ever-proliferating number of machine instances in the cloud. Just as they did in the early 2000s, they argue that, despite the scale, security, simplicity and technical convenience of public cloud services they must continue to charge for the old ways while adding costs for ‘managing’ something new.

Vested Interest

Salespeople are motivated by sales. Let’s turn the tables for a second: If your bonus was dependent on hitting a revenue target 20% higher than last year, why would you want to help your customer use less of your services?  Vendors love to talk about how they always have their clients’ best interests at heart, but when you break it down to cold hard facts, the numbers tell a slightly different story.

Now, this isn’t to say that vendors don’t provide a great service for their customers. They can’t be held solely accountable for a lack of knowledge in an area that, on the surface, appears to take away from sales (i.e. reducing their scope of activity or passing on the efficiency gains of a more elegant service). That doesn’t mean it has to always be that way of course. Many vendors are happy to negotiate once alerted to an issue – after all, they have their customers’ best interests at heart, right?

So, now we know our enemies, how can we take action to defeat them?

How does this translate into action?

Complexity, transparency and proliferation can be addressed with a very simple approach: monitor cost and consumption then manage the detail.

These are the four rules of cost and consumption management:

1. Monitoring is NOT the same as managing

Monitoring is what a good maître d’ does when they scan the restaurant every couple of minutes to check for issues.

Management is the painful process he or she undertakes to fix and issue, correct a failure or issue that dreaded ‘there will be no charge for that course, sir’ edict at the end of the meal.

Understanding the difference between monitoring and management is the key to success here.

2. If you can’t monitor consumption and cost then ONLY the supplier wins

Opaque, complex and confusing billing systems are the enemy of transparency and the friend of complacency and self-interest.

If your supplier can’t directly demonstrate, in an easily understood way, exactly what services you are consuming and paying for, then all the advantages of public cloud rapidly disappear in a mess of exploding costs.

3. If you don’t know your baseline and your budget forecast then you are sure to achieve it.

Moving to and maintaining a public or hybrid cloud environment requires that you are able to:

• Persuade the business to bear the transition costs
• Build a business case based on savings and flexibility
• Project your consumption and costs
• Compare these to your existing environment (hosted or in house)

Post implementation, the issue becomes monitoring, followed by managing costs and consumption so that the benefits are realised and the costs are kept under control.

So we’ve identified our enemies and created a set of rules to follow in order to achieve success. Still feeling a bit unsure about the battle? Concerned about navigating the financials of a cloud transition?

We’re always happy to discuss what it might cost to host, hybrid or totally transition to cloud and we would love to hear from you.

Get in touch here or contact David, Mike or Jonathan on +64 9 576 2107.