Understanding Return on Investment for Hybrid Cloud

Managing the Changing IT Landscape: Hybrid Cloud Computing

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I read a recent Business Cloud News report which predicts that nearly half of enterprises will have hybrid cloud deployments by the end of 2017. While the main driver for organizations to move to a hybrid cloud is shifting to agility, cost remains a primary top-of-mind consideration for IT.

The benefits of agility often come with incremental investment in areas to support automation infrastructure, solution interoperability, self-service or auto-provisioning tools, and advanced metrics reporting. These all can add costs compared to a traditional data center infrastructure, private-only cloud, or public-only cloud. The Hybrid Cloud for Dummies book calls out 13 costs associated with moving infrastructure to a hybrid cloud. Some argue that these costs or investments may warrant organizations to rethink their investment in and value of hybrid cloud.

The Cost of Complexity

However, business process and IT automation is often what organizations need most. In a recent article by blogger Greg Ness, he introduces the concept of the “legacy complexity tax,” a penalty we pay when the complexity built into existing processes and infrastructure creates obstacles to innovation. When we choose to live with these inefficiencies and don’t seek out the investments we would if we were starting fresh, then we are paying the legacy complexity tax. With this tax in mind, it might be prudent to shift the conversation about hybrid cloud from “What will it cost me?” to “Can we afford not to invest in the flexibility and agility that comes with implementing hybrid cloud?”

When Intel IT recently evaluated its approach to cloud, it evaluated these questions in a holistic way. IT finance, engineering, and cloud project managers joined forces to develop a model that looked at business needs (capacity), the flexibility benefits of a hybrid solution, and the cost of outsourcing to meet projected virtual machine demand over three years. During this analysis, Intel IT developed a financial model that seeks to provide an assessment of the variable cost for selecting between private, public, and hybrid approaches. This model accounts for a variety of valuation factors, including business velocity requirements, cloud interoperability, automation, monitoring, and security. Intel IT believes that hybrid clouds can save you money while enabling businesses to launch products and services rapidly and allocate resources efficiently to meet demand.

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Source: Cloud Computing Cost: Saving with a Hybrid Model. Intel (September 2013).

The Path to Hybrid Cloud

In my opinion, this positive outlook on operational costs means every business should at least be thinking about the potential for hybrid cloud to lower its IT costs and increase flexibility. Greater agility plus cost savings make a pretty strong business case. Develop your business case for hybrid cloud by learning more about the benefits, use cases, and technical considerations as they apply to your own organization. Here are a few resources to get started.

For those of you in the early consideration stages, look at Hybrid Cloud 101, a short overview paper that takes you through the basics about why hybrid cloud matters, capabilities, unique technology challenges, and how Intel can help. Links to other resources let you go as deep as you need to get comfortable with the topic.

If you’re in the planning stages, Intel IT highlights several key design elements when developing a dynamic hybrid cloud environment that support 99.99 percent availability, self-healing service recovery, and automated scaling. Check out the highlights video or read the detailed Intel IT hybrid cloud paper.

This BMW case study from the Open Data Center Alliance (ODCA) is a useful resource if you’re further down the planning road. The case study details the architecture, design, and technical approach behind BMW’s cloud strategy, outlining a two-phase approach planned around ODCA usage models that provide the tactics for turning requirements to implementation.

Hybrid cloud is an important business consideration for forward-thinking IT professionals. What is your organization doing to get ready?


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