Avoiding the unexpected costs of cloud computing. Without proper planning and governance, spending on cloud services can easily get out of control, putting your organization at risk of not realizing the benefits of moving to the cloud in the first place. This presentation helps you understand the frameworks and tools available to effectively manage and optimize cloud costs. You’ll Learn how to: (1) develop and manage optimal cloud budgets (2) assign accountabilities and track usage (3) continuously improve cost performance.

1. Cloud Cost Governance
Avoiding the Unexpected Costs of Cloud Computing

2. Your Presenters
Aaron Brooks
Director of Hybrid IT
Aaron.Brooks@softchoice.com
https://ca.linkedin.com/in/aaron-brooks-03b3068
Craig McQueen
Microsoft Practice Director
Craig.McQueen@softchoice.com
https://ca.linkedin.com/in/craigmcqueen

3. Today’s Objective
To provide some immediate next steps for you to
improve cloud cost governance.
$$ $

4. Agenda
1. What do we mean by Cloud?
2. Drivers & Barriers
3. Financial Challenges
4. Overcoming Challenges
5. Self Assessment
6. Q&A

5. What do we mean by Cloud?

6. Cloud Platforms Providers?

7. Public Cloud Spending Is Up and Growing

8. Cloud Drivers
Agility
Simplification
Optimization
• Speed to Deploy
• Choice of Consumption Model
• Access to Latest Features and Versions
• Improved Maintenance and Support
• Manage Cost/Risk
• Avoid Aged Infrastructure
• Applications
• Data
• Integration

9. Financial Barriers
Budget
Accountability
• Utility Model: OpEx vs. CapEx
• Many ways to deliver applications (SaaS,
IaaS, PaaS)
• Price is always changing
• Changing Business Requirements
• Insight into Over and Under utilized
resources
• Skills and Resources
• Provisioning
• Alignment between IT, LoB and Finance
• Cost allocation (Business and Services)
Optimization

10. Time
Customer Experience
Manage Risk
Business Impact
Cloud
Adoption
The Cloud Challenge

11. Trad
IT
Biz
Time
Customer Experience
Manage Risk
Business Impact
Cloud
Adoption
The Cloud Challenge

12. Trad
IT
Biz
Customer Experience
Manage Risk
Business Impact
Cloud
Adoption
Time
No plan
• Pilots
• 3-5 yrs
The Cloud Challenge

13. Time
Trad
IT
No plan DIY
> 30% Fail
• Pilots
• 3-5 yrs
Biz • Skills gap
Manage $
• No control
Customer Experience
Manage Risk
Business Impact
Cloud
Adoption
The Cloud Challenge

14. Trad
IT
Biz
Time
No plan DIY
> 30% Fail
• Pilots
• 3-5 yrs
• Skills gap
Manage $
• No control
Customer Experience
Manage Risk
Business Impact
Cloud
Adoption
The Cloud Challenge

15. Trad
IT
Biz
Time
No plan DIY
> 30% Fail
• Pilots
• 3-5 yrs
• Skills gap
Manage $
• No control
Customer Experience
Manage Risk
Business Impact
Cloud
Adoption
The Cloud Challenge

16. Softchoice Cloud Readiness Study – 2016
Don’t understand
implications of
CapEx vs. OpEx
spending
45%

17. Softchoice Cloud Readiness Study – 2016
Struggle to hold
lines of business
accountable for
cloud costs
44%

18. Softchoice Cloud Readiness Study – 2016
Lack tools to
track cloud
spending
42%

19. Softchoice Cloud Readiness Study – 2016
Have exceeded
cloud spends 57%

20. Time
Spend
Budget
Actual
Clients end up spending more than twice
as much as budgeted when governance
measures not in place.
Key Challenges:
• Budget
• Accountability
• Optimization
What We’ve Seen With Our Customers

22. Budget – Characteristics
• Capex
• Fix costs impede or kill projects
• Sunk Costs: Hard to pivot
• 1-3 year planning cycle
• IT owns technology budget
• OpEx: Agility, can pivot projects
• Consumption based model
• Forecasting becomes critical
• Variable Costs
• LOBs can own some technology budget
Traditional Public Cloud
Traditional Public Cloud

23. Time
Demand
0
20
40
60
80
100
120
Provision
for Peaks
$$$
Unoptimized Budget

24. Provision
for Usage
Burst to
support
demand
Optimized Budget
Time
Demand
0
20
40
60
80
100
120
$$$

25. Plan Your Public Cloud Spend Properly
Optimized Cloud BudgetTraditional Budget
• Planned for peaks
• Over provisioned
• Purchasing direct
• Plan for performance
• Right size Infrastructure
• Automation

26. • Four year useful life assumed for on-premise hardware
• Burdened at approx. 30% for environmental, space and maintenance
• Over Provision and Under Utilized
• Downtime for maintenance and feature upgrades
• Costs Historically decrease 10% year over year
• Reduced downtime for upgrades and maintenance
• No assets
• No Maintenance or Break-Fix costs
Budget Influencers When Thinking Cloud
Public Cloud
Traditional IT

27. What to Do…
Applications Assessment Contingency Get Started
$$ $

28. Accountability – Characteristics
• Application use to accountability
typically clear – can map 1:1
• Can strive to shared costs if services
are used by more than one LOB
• Clear procurement/provisioning rules
• Without strategy, difficult to detail cost
allocation
• With strategy, full/partial cost allocation
is easy
• Close tie of revenue and cost
• Open provisioning leads to escalated
costs
Traditional Public Cloud

29. Determine Accountability
Line of Business
Finance
IT

30. How do I want to measure my costs?
Customer Department Project

31. Procurement
Procurement
• Users
• Applications
• Infrastructure
• Platform Services
• Process Controls
• Technical Controls
• Auditing
What? Scope? How?

33. Governance Workshop
Availability
Business
value
Business
priority
Who makes
decisions
Why it’s
there
Who pays
the bill
Deployment
Identifier
…
Deployment Owner Purpose Steward Priority Net Benefit Operations
Active Directory IT Security CIO Critical Productivity of end users 24x7
Web Site Marketing Public information and branding CFO Critical Demand Generation 24x7
CRM Sales Manage our Customers Sales VP Normal Client Relationships 9x5

34. Optimize – Characteristics
• Resources fixed
• Scaling is slow and costly
• Limited ability to optimize costs due to
CapEx Investment
• Optimization comes by way of refresh
• Insight focused on performance vs.
spend/cost
• New Tools Required to measure:
• Spend
• Performance
• Usage
• Ongoing Optimization and right sizing
• Leveraging PaaS and App Modernization
Traditional Public Cloud

35. Forecast to Your Budget
• Set a Budget
• Tools to measure in real time
• Alert before you overspend

36. Track Spend & Allocate Costs
• Leverage Catalog
• Track Against Outcomes
• Give Visibility to Stakeholders
• Update Financial Processes

37. Optimize Cloud Environment
• Measure Performance
• Report on Usage
• SLA
• Right Size
• Automation
• Platform Services

38. Breaking Through The Barriers
Budget
Accountability
Optimize
• Tool Based Budgeting
• Forecast to Budget
• Governance Workshop
• Track Spend
• Allocate Costs
• Measure Performance
• Understand Usage
• Right Size / Automate
Challenge Solution

39. Two dimensions of Cloud Success
Speed of Adoption Managing Governance

40. The Adoption –Governance Model
Realize
business
benefits sooner
Competitors take
market share
No accountability to
Cloud spend
Optimal control
over Cloud spendGovernance
Adoption

41. Exercise 1
Calculate the extend and
speed of your organization’s
cloud adoption.
SELF-ASSESSMENT

42. Exercise 2
Calculate the extent to
which your organization can
govern and manage cloud
costs.
SELF-ASSESSMENT

43. SELF-ASSESSMENT: Plot Your Scores
44-50
36-43
28-35
20-27
12-19
5-11
5-11 12-19 20-27 28-35 36-43 44-50

44. SELF-ASSESSMENT: Interpreting Your Results
Hesitant Cautious
Cowboy Leader
Governance
Adoption

45. SELF-ASSESSMENT: Strengths vs. Opportunities
Hesitant Cautious
Cowboy Leader
Adoption
Governance
Speed and Agility
Run Governance Workshop
Invest in Tools to Gain Insight
Strengths
Opportunities Balanced
Continuous Improvement
Automation and Modernization
Positioned for Execution
Analyze Workloads to Create Budget
Get Started with Production App
Minimized Risk
Right Size and Optimize
Create Roadmap for Adopting Cloud

46. Recommendations: Tools & Services to Drive Improvement
• Cloud TechCheck
• Workload AnalyzerHesitant
• Jumpstart
• Vendor-funded initiativesCautious
• Governance Workshop
• Customized ConsultingCowboy
• Keystone
• Softchoice Cloud DashboardLeader

47. Thank You!
Contact us today. 1.800.268.7638 | www.softchoice.com