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April 08, 2013

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Brett

finally someone else did the maths. Yes our VNX has come in allot cheaper than AWS/S3 and just moving our email or ERP servers to cloud costs my 80% of my IT budget per year just in compute costs. I look at it as a challenge to remain more agile, cheaper and more available than AWS and so far has been great!

I could write lots on this but never quite find the words to explain the change in culture that is needed and it certainly seems only those who know it understand it. In saying that its not even about cost its about business value and success.

Paul Lembo

Chad,

Rant or no, the heart of your argument is sound. Agility and transparency are not marketing buzzwords, they are not just "nice to haves" on an approved projects list.

Its this simple... so called Shadow IT is more than just a shadow today and its not there b/c its actually cheaper.

Have you decided to act on that? Do some math? : ) Try new things even if they are initially uncomfy?

Let me end with a quote from my favorite three wise men, a call to fence sitters not yet motivated...

"If you choose not to decide, you still have made a choice!"

Stay well,

Paul

Theron Conrey

Awesome post. This perfectly highlights the procurement costs of storage while still highlighting the trouble in napkin math. One thing that you didn't mention are the two most expensive costs is storage over time. Power and People.

Brian Gracely

@Chad - you and I discussed some of this offline, but I'll throw out one other "cost" consideration if you're trying to make an apples to apples comparison. I wrote about it a little bit here (http://www.cloudsofchange.com/2013/03/the-changing-feel-of-vmware-pex.html), in the vCloud positioning section, but it goes something like this:

CAPEX COSTS - The cost to buy assets. Everyone understands these (IT, Finance, BUs)- they show up on the balance sheet. The cost to buy assets.

OPEX COSTS - The cost to operate assets (or services). These are understood by some, but harder to quantify since they are variable based on usage, efficiency, etc. And to improve them, it doesn't mean a change to a CPU, it often means a change to a person(s) or process(s).

OPPORTUNITY COSTS - The potential cost to lose out on another opportunity (cost-savings or added-revenue) because a dependent choice was made. These are difficult for many people to understand because they are theoretical, don't show up on the balance sheet and are strategic vs. tactical.

Right now too many traditional IT companies (and IT organizations) are trying to make a cost comparison without factoring in OPPORTUNITY COSTS, or the timeframes of the groups demanding cloud services (eg. Business Units needing to make quarterly numbers).

So unlike other big promises like VDI (where technology has been a true bottleneck), Private Cloud is failing to gain traction because the groups that are supposed to be the "new service providers" (eg. IT groups evolving to IT-as-a-Service) don't know how to go to market in a competitive environment.

Randy Weis

@Chad, as usual a dead-on discussion of the business value of technology. This is very timely as my company is re-making itself as a broker of cloud services. I've been struggling to make the case to shift to service-oriented IT from the technologist point of view, but I am relieved to know that my frustration is shared. I feel somewhat vindicated that I have come to many of your conclusions, but I haven't done the math the way you have.
@Brian, please repost your Clouds of Change blog, as it has been taken down.

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