Cloud Computing and Strategic IT Budgeting

By Neil Smith

Companies are willing to invest heavily in cloud computing as they believe cloud will play a vital role in shaping up the business landscape. One of the primary changes would be in terms of increased IT capabilities incurred as a result of reduced spending on factors like software licensing, investments in storage or other physical infrastructure like servers and need of IT staff for software upgrades.

Cloud computing as a vertical is often broken down into three basic sectors; IaaS, PaaS and SaaS, these services are applied based on the company’s needs and budget for the cloud.

It’s essential to choose a genuine cloud computing vendor to meet your requirements. The yardstick to select a vendor could be the availability of tailored solutions, cloud security, service agreements, user friendly interface to monitor the billing, performance of the server API and compatibility with applications etc. Vendor selection should cover overall business suitability and flexible subscription models such as pay-as-you-go.

Understand the business issue and align the budget for the desirable solution – Organizations have to understand the problem they’re trying to resolve and then allocate fund for a tool or approach that might lead to a solution. A fundamental question that has to be answered by the organizations is whether a cloud computing solution is required in their business or not. For many small and midsized companies if they don’t have an IT department, then it makes more sense to outsource their IT needs, and that’s where cloud computing comes to picture and looks so appealing for companies.

Cloud computing vendors provide a pay as you go option, which enables the business to pay for only what they use. However, for some companies having their own servers is a better choice rather than budgeting for the cloud.

Elasticity and public cloud – A public cloud holds computing capacity solely on a virtual private network where highly sensitive data is stored. Cloud is all about flexibility, allowing addition/removal of resources according to the requirement. Elasticity is not only about increasing the resources when organization needs to scale up but also shrinking them back when the database is underutilized at no extra cost. If the workload you have is stable and follows a predictable demand pattern then flexibility of cloud becomes less of an advantage and a traditional data center might be more cost effective for you. If the demand is unpredictable and workload varies, then organizations can opt for cloud and allocate budget to cloud.

Elasticity and private cloud – Private clouds are built exclusively for an individual enterprise. They allow hosting applications and have security advantage.  Private clouds own the physical hardware and elasticity can be achieved by an over provision of resources. In a private cloud scenario it’s required to specify the resources, purchase, update, maintain and safeguard the physical infrastructure. High server utilization has to be maintained when multiple tasks are running simultaneously at different traffic patterns as elasticity is a priority in a private cloud, in the hope that the spikes spread out over time, rather than bunching up.

Elasticity limitation in private cloud can be overcome through cloud bursting to a public cloud when workload spikes require it. Cloud bursting resolves the elasticity issue but it’s difficult at the technical level.  Budgeting for private cloud includes predicating the seasonal spikes of demand; budget should emphasize the solution not the technology.

The main motto of organizations should be to solve a business problem rather than buying an irrelevant product. If the optimal solution to your requirements is dependent on workloads and requirements which you feel are ever evolving then a cloud based solution might be the one for you.

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