How do I understand the true cost of putting IT in the cloud?

Cloud computing seems to be on every IT director’s shopping list, but do they really understand the costs of moving in-house resources into the cloud.

IT service providers are the companies doing cloud implementations. Not many businesses will build their own cloud infrastructures.

So the service providers need to be able to show CIOs how much it will cost to move systems to the cloud and how much it will cost to keep it in-house. But this information is not easy to gather.

But there are start up companies that are building businesses around this gap and they appear to be winning big customers.

I met a start up known as Romonet the other week. CEO Zahl Limbuwala, told me about the company’s software, Prognose, which allows IT directors to quickly work out how much it will cost whenever you put a new resource, such as a server, into the datacentre.

The application allows datacentre planners to drag and drop devices into a template that matches their datacentre. It can calculate the additional costs in terms of power use.

The software has a huge database with detailed information about all the equipment a datacentre might use. For example if you choose a particular IBM server the software calculates the costs based on the database information.

It also forecasts the costs in the future. Romonet is still only a small company and still really a start-up, but it has big customers including Dell, Thomson Reuters, Arup and Fujitsu,

With businesses looking at the cloud the technology will help them decide whether it is cost effective. It will allow them to compare in-house against cloud as well as private versus public cloud.

Users only need three days training to learn how to use the Java application.

Another Start-up, known as Apptio, which has recently received $40m in venture capitalist funding has developed software to help businesses work out the true cost of IT.

Apptio software, which uses information from the general ledger, the Configuration Management Database, the support desk and one of projects gives businesses detailed information about total cost. As a result they can make informed decisions about things like outsourcing IT and moving to the cloud.

Facebook, Microsoft, Cisco, Google and Starbucks are already customers with a major European bank soon to join this list. Again it is a small company but it has massive customers.

Roy Illsley, principal analyst at Ovum, said CIOs need metrics to help them make decisions regarding cloud computing.

“There’ll be a big mash-up and it needs managing. Predictive modelling enables companies to analyse and compare scenarios and say whether the move makes sense or not. Such level of knowledge and information is a great basis to make decisions, based on better assessments.”

Here is an article I wrote about this in November last year.