The ease to set up a cloud deployment--done with little more than a credit card and an internet connection-- has resulted in a decentralization of IT management for many enterprises. This booming “Shadow IT” environment creates a host of management and cost issues for enterprises and usually leaves IT departments holding the bag. Very quickly, IT departments find themselves without control or even insight into the services being consumed, or even under-utilized, within their own organization. As independent units deploy in the cloud, the management and maintenance of these systems can lapse and quickly costs spiral out of control. A smart IT manager quickly realizes that he/she needs to be able to gain visibility to the entire corporate cloud environment, centralize the management of the systems and create methods to do more with streamlined resources in the cloud – or face a potentially very nasty bill for cloud services at the end of each month. For today’s IT departments to offer the best resources for the enterprise, the move to the cloud is becoming a necessity. To do this without loss of control, business and technology decision makers need to be able to see, measure and be notified on cost and consumption violations from day one. With this in place, IT’s management of cloud spending can be on budget and dynamically managed for optimal cost or performance improvements. This session will walk CIO/IT managers through the key areas to consider in developing a cloud computing insight & management system and reporting mechanisms. It will also address why it is critical for IT to play a role in cloud development and management and some methods to help avoid circumvention of IT management within a “shadow” cloud.

1. 1
Shine a Light on Shadow IT
Effective Cloud Cost Management
Sharon Wagner, CloudSlam ‘12

2. 2
Outline
Introduction, Cloud in Shadow IT
Cloud cost management process
Customer case study and lesson learned
Summary, questions and answers
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3. 3
About Me
Director of Product Management, Oblicore
Sr. Principal, Cloud Connected Enterprise, CA
Founder and CEO, Cloudyn
www.cloudyn.com | info@cloudyn.com

4. 4
Shadow IT is here to stay
“IT controls less than 50% of corporate technology
expenditures”, PwC , June 2011
“In less than three years, 35% of enterprise IT
expenditures will happen outside of the corporate IT
budget.”, Gartner, Dec 2011
Cloud vendors doing their best to increase adoption
Variety of services
Provisioning agility
Resources availability
Continuously decreasing cost
www.cloudyn.com | info@cloudyn.com

5. 6
Aligning IT to business demands
IT
Control
Cloud
Adoption
Business
Agility
www.cloudyn.com | info@cloudyn.com

6. 7
Both IT and the business are:
Losing cost
Control Unable to maximize
Investment
Can’t plan Over-provisioning
Capacity resources
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7. 8
www.cloudyn.com | info@cloudyn.com | Cloudyn Confidential and Proprietary

8. 9
If you can’t beat them, join them!
Leverage your domain expertise
Know all cloud options
Find the best business terms
Streamline your cost management process
www.cloudyn.com | info@cloudyn.com

9. 10
Effective cloud cost management
Based on feedback from
key enterprises with $1M+
cloud spend annually Discover & Assess
Act, Change,
Optimize Set Operational
Controls
Set Organizational Align to Corporate
Controls Goals
www.cloudyn.com | info@cloudyn.com

10. 11
Energy & Co case study and lesson learned
A World wide energy company
Jim is an IT director
Energy & Co has a significant IaaS footprint
Multiple business units
Development, testing and production
what
Over 100 cloud accounts, +2000 servers resources
Fluctuating environment belong to
which task?
How will I
explain this
bill to my
boss?
What
resources are
REALLY
needed?
www.cloudyn.com | info@cloudyn.com

11. 12
Understand your cloud resources consumption
• 32 Extra Large servers running idle for 2 months Discover &
Assess
Set
• 3852 snapshots of a single volume
Act, Change,
Optimize Operational
Controls
Set Align to
• 11 reservations with no associated instances Organization
al Controls
Corporate
Goals
• 3 non-production databases running in 4.3% CPU utilization
• 80% predicted growth in annual cost
Taking care of these reduces cost by 34%
www.cloudyn.com | info@cloudyn.com

12. 13
Control resource consumption in real-time
Discover &
First, set operational alerts: Act, Change,
Assess
Set
Optimize Operational
Controls
Daily growth in # of instances exceeds 5% Set Align to
Organization Corporate
al Controls Goals
Weekly growth in cost exceeds 5%
Unused resources
Underutilized servers, databases
Now at least there won’t be any surprises
for Jim!
www.cloudyn.com | info@cloudyn.com

13. 14
Define cost units and break-down the spending
Map cloud resources to business units Discover &
Assess
Act, Change, Set
Optimize Operational
Define business units Controls
Set Align to
Define resource mapping rules Organization Corporate
al Controls Goals
Define budget structure
Define owners
Set cost and consumption views
Spending became clearer:
Jim could see who spends what, where and when
www.cloudyn.com | info@cloudyn.com

14. 15
Have unit owners control their costs
Discover &
Assess
Set business metrics Act, Change, Set
Optimize Operational
Controls
Budget violation projection Set Align to
Organization Corporate
al Controls Goals
Abnormal consumption growth
Cloud usage inefficiency
Correlate cloud cost with business activities
Now control was delegated to the unit
owners, with Jim supervision
www.cloudyn.com | info@cloudyn.com

15. 16
Usage-based cost and capacity optimization
Rightsizing first: Discover &
Assess
Act, Change, Set
Constantly eliminate unused resources Optimize Operational
Controls
Downscale overgrown instances Set Align to
Organization corporate
Get rid of retired storage al Controls Goals
Price optimization to follow:
Optimally reserve instances based on usage
Reallocate resources to existing reservations
Eventually the bill dropped by ~35% !
www.cloudyn.com | info@cloudyn.com

16. 17
Summary
Enhance your domain expertise
Know your cloud options
Think small – avoid traditional capacity allocation
For fine-grained control
Over-provision to the right extent
Leverage usage trends to rightsize consumption
Your environment is dynamic
Your solution should be dynamic too
www.cloudyn.com | info@cloudyn.com

17. 18
Thank You
sharon@cloudyn.com
Cloud Economics
@cloudyn_buzz
blog.cloudyn.com