News Stay informed about the latest enterprise technology news and product updates.

IT unknowns pose a stumbling block to cloud cost savings

IT pros who expect the cloud to result in cost savings may be surprised if they make the leap without knowing their existing infrastructure usage.

NEW YORK -- Sticker shock is a reoccurring theme among large businesses that migrate to the cloud amid promises of considerable cost savings.

Knowing if the cloud is a good deal or not can be difficult when IT teams don't know how much infrastructure they use in the first place, according to Andrew Reichman, president of consultant firm Reichman IT in Seattle.

"When IT is a monopoly and you just buy a bunch of servers and people use what they use, very few do chargeback, very few boil down to a granular level," Reichman said during a presentation at TechTarget's Modern Infrastructure Decisions Summit here this week. "You're not trying to enable good decisions, because there are no decisions. You either use IT or you don't use IT."

Contrasting the cloud against existing data center use can be difficult, according to Reichman, a former infrastructure as a service (IaaS) marketing lead for Amazon Web Services (AWS). Outsourcing IT also comes with abstract costs that are built-in, such as the price of renting space and the power and cooling costs.

A true metered cost can be pretty revelatory about usage, and the choice becomes more difficult when it's spelled out by IaaS providers. Very few large enterprises nail down billing per server or per gigabyte of storage, so understanding consumption patterns becomes the biggest barrier for users considering a move to the cloud, Reichman said.

With metered service, the biggest technical divergence from traditional IT is the ability to use an "off switch" with the cloud, Reichman said. Vendors typically charge more for data that flows out of the cloud than data flowing into the cloud – a model used to shape usage behavior.

Bill for what you think you need, look at what makes you freak out when you see the bill and change it over time.
Andrew ReichmanPresident, Reichman IT

"Time matters in the cloud," said Reichman.

Getting a cloud bill every month can be a powerful tool to understand exactly how data storage is used and to adjust properly, Reichman said.

The cloud's scalability and elasticity make it best suited for IT shops that deal with variable spikes in workloads, unknown or speculative workloads, or to address inefficiencies within an IT shop, Reichman said. And while cloud capacity planning  can be difficult, particularly during erratic spikes, going to the cloud can be better than buying too much underutilized infrastructure.

But the cloud isn't always going to save money, Reichman noted. If a company struggles to manage its existing resources and is simply looking to shift to the cloud, those same inefficiencies will likely persist.

And while Reichman said AWS is not interested in overselling, it's hands off enough that enterprises without a good sense of how much data they use or don't monitor their usage in the cloud could end up spending more through a metered system than with traditional infrastructure.  It's a matter of finding the right fit in the cloud, Reichman said.

"We're still in early stages [of cloud services]," said Reichman. "It's going to be trial and error. Bill for what you think you need, look at what makes you freak out when you see the bill and change it over time."

Trevor Jones is the news writer for SearchCloudComputing. You can reach him at

Dig Deeper on Cloud computing standards and compliance

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.