Building a Business Case for a Private Cloud

There is an undeniable force impacting IT, and much like in nature, it is all starting with a cloud. Companies embracing cloud computing are reaping benefits. Their IT infrastructures are transforming into dynamic, self-service environment where their customers can request and automatically receive new computing services, removing IT as a bottleneck and placing them as a business enabler for the first time in decades it seems.  The operational savings of delivering a machine in a matter of minutes or hours, versus days or weeks, is an incredible incentive for many organizations. Last year, VMware’s own IT managed to save 90% of the time for provisioning and 30% of the costs by building out a self-service cloud.

That said, responsible companies still seek to do due diligence and build a business case to justify this type of transformation. Looking for areas that will provide the biggest benefit, and prevent any hidden costs in deploying a private cloud, is a healthy exercise to guide your investments in cloud computing.

Where To Start

InfoWorld’s resident cloud computing expert David Linthicum recommends that companies focus first on the value and ROI to ensure a successful private cloud deployment. Starting that process can be daunting if you don’t know what you are looking for in the first place. Most companies struggle with how to quantify the savings as well as the costs since this is such a new area for them.

However, without these quantifiable goals and objectives, your project may never get the business approval required to get off the ground, or worse, you won’t know if it has been successful.

It does not have to be a mystery like this Geek and Poke cartoon. The secret is to build on the collective knowledge of those that have been successful. By nature of what we do, VMware gets to speak with lots of companies embarking on this journey daily. To help your journey along, we’ve compiled information from over 30 different companies about the benefits, costs and pitfalls associated with managing their existing IT infrastructures. I plan on sharing over the next few weeks some of the trends, experiences and tips to help you out as you embark on this journey to building out your private cloud.

Where To Look For Savings

Most companies start by simply virtualizing a good portion of their compute infrastructure. Server consolidation remains the primary motivation for most companies to move to a virtual infrastructure, especially for companies that have applications that need to scale dynamically. Better usage of floor space, reduced cooling, and sheer savings on hardware are all obvious benefits.

Past server consolidation, companies should look at how they deliver compute services. By enabling their cloud to be a self-service private cloud, much like how the public clouds operate, companies can transform processes which used to take weeks or months, to workflows that can now be accomplished in a matter of days or hours. This involves taking your cloud to the next level and providing automation services. For more on the benefits for this process, see the story on how VMware’s own IT organization saved 30% of the IT costs associated with deploying applications by deploying cloud service provisioning solutions like Application Director. Also, by standardizing their service catalog and putting in policy based provisioning and deprovisioning, they plan to save an additional $6MM in IT costs simply by making rules that ensure that the level of compute service provided matches the category of effort and is decommissioned as soon as its no longer necessary. To do this, they deployed vCloud Automation Center (vCAC) alongside Application Director and vCenter Orchestrator.

While the cost savings of virtualizing your data center are substantial and undeniable, the financial benefits and service delivery improvements of deploying on-demand, self-service private cloud infrastructures have savings that are at least as compelling if not even greater. So be sure to explore these areas:

• Improve operational efficiency.  Even with virtualization, most companies still take days or weeks bringing new compute resources online, such as a new development environment or marketing microsite. What’s more, it can take equally as long to make changes to existing resources. Companies using at Cloud Service Provisioning have been able to improve service delivery times from days to hours while freeing up their limited IT resources to work on more strategic initiatives. Look at the streamlined costs for IT, but also be sure to include the benefits for application teams and business opportunities that you may be better positioned to capitalize on by simply being faster to market.
• Optimize resource utilization. Virtual machine sprawl is a serious problem for companies using cloud computing. It becomes so easy to deploy machines, that if you aren’t strict on how to decommission them, you end up with lots of machines spun up that are sitting idle. Look to put governance around they types of compute resources available for different activities, and ensure assets are retired as soon as they become not useful. By automating governance and control, you can help enforce consumption policies that can improve your utilization by 25-30% or more.
• Accelerate virtualization deployments. By running an app on private clouds, organizations can run them up to 12% more cheaply. Therefore, adoption of the cloud should be one of your goals for the whole organization. Standardizing on this flexible, cost-efficient IT infrastructure will benefit the whole company. But users need incentives. By deploying additional end user services such as self-service and management tools, application owners will want to move to your infrastructure over going to a more expensive external public cloud or just by letting the status quo remain.