Cost optimization is a frequently cited reason for adopting cloud computing. However, some organizations are finding that during the migration process, replicating what is in your data centers isn’t yielding ideal results and expending numerous resources. Cloud Technology Partners Principal Architect Kacy Clarke and Global Alliance Manager Stuart Robertson discuss the realistic results you should keep in mind during your initial TCO/ROI analysis and suggest best practices to realize those goals.

1. © 2016 Cloud Technology Partners, Inc. 1
Cloud Economics
From TCO to ROI - Understanding the bigger picture.

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1. Ensure realistic expectations for your TCO / ROI analysis
2. Walk through the process of creating a holistic TCO / ROI analysis
3. Reflect on results uncovered through prior engagements
Goals of this Presentation

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Introduction
• AWS Certified Solutions Architect
• Cloud architecture, application migration,
cloud strategy, DevOps / CloudOps
kacy.clarke@cloudtp.com
@kacyclarke
Kacy Clarke
Vice President,
Principal Architect at CTP
• AWS Certified Solutions Architect
• Former Business Analyst with a history in
Private Equity
stuart.robertson@cloudtp.com
@S_D_Robertson
Stuart Robertson
Manager,
Global Alliances at CTP

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We Are Re-Living History
Forced faster
production
Ensured safer
transportation
Inspired innovation
by removing
resource constraints
Do these major changes remind anyone of a
current technology shift?
The Industrial Revolution forced the world to change in 4 major ways.
Punished
lethargy and
rewarded agility

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How many of you…
Read an article that claimed 50-80% cost savings in the cloud?
Assumed migrating to the cloud would cost the
same as a typical DC migration?
Are concerned about the cost of achieving security and
regulatory compliance in the cloud?
Have been shocked at the spend of development teams
with access to the cloud?
A Few Provocative Questions...

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5 Truths for Cloud Economics
1. Replicating what you have in your data center to
the cloud will yield nominal savings.
2. Typical data center average server utilization is under
15%. Optimized cloud deployments achieve 75%+
3. Securing your applications requires investing in cloud-
aligned security frameworks for defense in depth.
5. Understanding the impacts of organizational
transformation is critical.
4. Investing in full stack automation for agility is not
cheap - but it’s worth it.

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ROI
TCO or ROI?
Transitional
CostsCost
Calculations
Full program costs vs.
value calculations
The complexity of a cloud economics calculation depends
on the needs of the business and the context of the
migration program.
Pure TCO TCO Plus

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• Compute, network, storage
• Server utilization
• Software versions
• Operational tools
TCO Starts with Understanding Your Deployment Architecture
• Rightsizing
• Uptime scheduling
• Environment reduction
• Defense in depth security
Current Footprint Cloud Footprint Optimization
40% Scheduled Uptime
30% Scheduled Uptime Autoscaling
Stage
Production
Test
Test
Test
Test
Test
Test
Dev
Test
Test
Te
st
Te
st De
v
Te
stTe
stDev
ProductionStage

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Current State Assessment
Application Inventory Estate Level Assessment
• Sample Application Assessment
• Full Estate Inventory
• Application Migration Approach
Service Levels and Operational Environment Assessment
• Current Infrastructure and Operational Costs
• Current State Architecture Qualities and Requirements
–Availability, Security, Compliance, Scale, Performance, Resiliency
• Current State Operational Models and Processes

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Future State Architecture
Application Architecture and Migration Framework
• Sample Application Footprints
• Full Application Estate Extrapolation
• Migration Factory Architecture and Approach
Common Services and Operational Framework
• Common Services Footprints
• Common Services and Operational gap analysis and build out
• Reference Architectures
• Operational Transformation

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TCO Model
Application TCO
• Application Bill of Materials
– Cloud services, licenses, etc.
• Ongoing Costs
• Application Migration Cost Model
Common Services TCO
• Common Services Ongoing Costs
• Common Services Platform Build
• Operational Transformation Costs

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Qualitative
• Agility
• Developer / Operational Efficiency
• Talent Recruitment Capability
• Adaptability
• Consistency
• Ease of Use
Business Benefits / ROI
Building the Business Case
1. Define the strategic objectives
2. Outline success criteria
3. Identify the qualitative and quantitative benefits
by assessing the current and future state
4. Deliver the Executive Presentation
Benefits
Quantitative
• Infrastructure costs
• Support costs
• Licensing costs
• Uptime
• Mean time to recovery
• FTE’s
• Release frequency

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Once the initial TCO/ROI model is created to justify the move to cloud, it
transitions into a living document and provides guidelines for the journey.
On-going alignment to application costs and benefits
• Comply with time and effort constraints for application refactoring
• Rightsize application infrastructure
• Align HA/DR approaches to actual SLA’s
• Utilize reserved and burst instances appropriately
Limit “cloud sprawl”
• Shut down idle dev/test environments
• Archive occasional use environments
• Schedule resource allocation and deallocation for spikey loads
• Implement leases and limits on sandbox environments
From Business Case to Business Guidelines

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1. Value of agility
2. Costs to retire selected applications, infrastructure, or data centers
3. Changes required to maintain service levels
4. Software costs
5. Organizational transformation costs
Top 5 TCO/ROI Overlooked Areas

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Cloud Economics
Are you getting the bigger picture?
cloudtp.com/doppler
More on this topic

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Boston Headquarters
263 Summer Street
Fourth Floor
Boston MA, 02210
Contact
617.674.0874
info@cloudtp.com
www.cloudtp.com
Questions?
Kacy Clarke kacy.clarke@cloudtp.com
Stuart Robertson stuart.robertson@cloudtp.com