Managing costs on your journey to cloud

Procuring cloud services can be relatively easy, but integrating them into existing IT environments can be complicated

It was not so long ago that cloud computing was just a buzzword which companies struggled to understand. Now, we are in the midst of a major technology wave as we see social, mobile, analytics and cloud converging to create unprecedented disruption and evolution. This convergence means that every business is a digital business.

Accenture’s 2013 Technology Vision identifies seven technology trends that are shaping the future of enterprise IT, with cloud underpinning all of them. Cloud is pervasive and it is here to stay, and we will see more and more software and platforms delivered in the cloud in the years ahead.

As the adoption of cloud accelerates, organisations need processes and tools in place to forecast and manage costs. Businesses need to consider the following.

The complexity of choice

Public cloud contracts can bear a closer resemblance to mobile phone contracts than a utility contract. This is partly due to the multiple tariffs made up of many piecemeal components and assessed across a variety of types and combinations.  

Server prices are often presented in an eye-grabbing manner of a few cents per hour, but any total cost of ownership analysis needs to cover all aspects of an operational solution. For example, on-premise private cloud deployments require dedicated hardware, storage and networking, along with orchestration and automation tools to make the technology ‘cloudy’, all of which requires some long-term design choices to be made early on. 

Organisations should take a methodical approach to avoid investing in the equivalent of a costly high-performance two-seater sports car when a slower people carrier might be better and cheaper. Hybrid models seek to strike a balance between private and public cloud benefits and careful consideration needs to be given to the architecture to prevent the top speed of your on-demand sports car being limited by the caravan you are towing.

Entry cost and integration expectations

For both private and public cloud adoption, the expectations of base build infrastructure, connectivity and integration costs need to be carefully managed

Public cloud providers recover their upfront investment by spreading the volume and risk across many customers, giving each of them a level of flexibility to scale up and down or walk away. Whereas on-premise, private cloud platforms need to be paid for on day one, one way or another through "seed" capex or financing. 

Without careful planning and controls, the cost of operations, support, service integration and management can be underestimated. For end-to-end value, integration with existing systems and processes needs to be considered. So it is imperative that businesses think about the whole "iceberg", not just what’s above the water

A holistic approach to drive success

Cloud is already helping to drive considerable cost and agility benefits to many organisations, yet it is important that IT departments try to limit surprises, as this could undermine their standing with the business.  

With a structured and methodical approach to developing adoption roadmaps, IT has the opportunity to become an accelerator to the business and to deploy "right-touch" capabilities where business benefits can be clearly articulated, and exceed the full end-to-end cost of operations.

Procuring cloud services can be relatively easy but integrating them into existing IT environments is a more daunting and complex task. However, if done correctly, businesses can benefit hugely from cloud computing, and the innovative technologies it supports. 

Cloud opens up the ability to connect with customers any time and anywhere, enhance insight into advanced analytics, eliminate organisational boundaries, support faster innovation and broaden the global footprint and capabilities that every company needs to compete in today’s market.


Gwill Davies (pictured) is infrastructure cloud lead for the UK and Ireland and agile IT principal at Accenture.

This was last published in June 2013

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