Cloud: Cost Reduction vs. Risk

How can organisations adopt a Cloud strategy?- Mark Godfrey, CEO

With the G-Cloud iiii about to be launched and UK government adopting a cloud first policy for IT procurement, it is evident that the Cloud is a strategy that is here to stay.

The questions from our customers, in my experience, are where and how to start and they want to know how to take advantage of the cloud service and its potential savings. This is closely followed by the usual concerns that surround data management, security and risk.

There are endless numbers of articles which on the potential savings and benefits relating to speed, choice and flexibility of cloud based offerings.  So, why the concerns?

Cost Reduction vs. Risk- Why the Cloud is the elephant in the room.

Due the misapprehension of how to approach and adopt cloud services it is being ignored or going unaddressed. This is usually the result of misperception at the onset of looking into cloud services. It seems logical to believe that the largest benefits of cloud computing will be borne out by outsourcing the biggest enterprise applications. These applications are the most expensive to buy yet at the same time the most difficult to deploy; the most cumbersome and costly to sustain and upgrade. A large proportion if IT budgets (over 70%) are spent keeping existing applications and projects running. On paper therefore, taking them as a cloud service would provide the best return in terms of cost reductions and benefits.

But there’s an issue….

These applications are often the ‘élan vital’ of the organisation and represent risk in equal measure to the potential rewards of changing how the application is provisioned. This risk is felt equally by either the ‘in house IT function’ or ‘Managed Service provider’. Due to this being quite an intimidating prospect, it is often pushed to the back and more manageable projects dealt with first, which isn’t surprising but could be detrimental to the organisation. Cloud is reported back as risky and difficult; some of the high profile cloud outages over the last few years have not reduced this ‘fear’ factor of migrating core system to the cloud.

Before we attempt to eat the elephant in the room, there is a more logical approach thankfully, so, let’s see what else is on the menu…..

The logical approach to adopting Cloud

For ease or transition, the shift to Cloud services should be approached as an evolutionary rather than revolutionary progression and the first projects to be tackled should be low risk; low impact; low complexity and measurable in terms of cost and benefits realisation. This will then lead onto getting the core systems into the cloud, it may take a little longer to do this, but the process is less fraught.

1. Analyse what data is low risk?

It is key that understanding of the information and applications within an organisation is sought, and it is clear what low risk is. One of the first products AI created was AI.ANALYTICS. It’s a low impact tool that crawls legacy unstructured data stores and analyses potential benefits in data and application consolidation as well as achievable cost savings. The principal benefit of this tool is that the results are based on customer data and not the speculation of a world of analysts or consultants, so therefore, the predicted benefits can be validated and adjusted to suit risk and access or recall profiles. Likewise, then the organisation can plan their data management and migration projects better, often over to new applications resulting in saving money and creating an amalgamated information environment going forward.

Using AI.ANALYTICS we have found that many organisations hold a staggering amount of redundant data which is never accessed and generally only kept because there is no secure policy or procedure for deleting it. Astonishingly we have discovered that 58% of data is redundant, this equates to a staggering average cost of £20,000 per terabyte per year.  Any individual can buy a terabyte drive on the high street for less than £70.00, however for traditional storage providers who hold 50 Terabytes in a data centre and then need to keep it all running at 99.999% availability, this, it seems, is what they would charge, and we, it seems are happy to pay it?

2. “Archiving as a Service”-Cost effective cloud storage

AI.FILEMANGER was born through partnership with our Cloud Service Providers. A guileless process of data analytics, cleansing, extracting and policy based archiving that allows any organisation to put a defensible, recall based archive policy on data held in a secure, accredited cloud service.

How is this approach low risk; low impact; low complexity and measurable?

Low risk: the majority of data is kept through governing obligations and not because of the need to access it. Fact- Less than 2% of documents over three years old are ever recalled.

Low Impact: This is an automated process that never touches recent, high recall information. End users will not even realise that it is happening.

Low Complexity: Older data is much easier to apply rules and policies?  Think of it as a new approach to Physical Document Storage.  When my filing cabinet is full, I transfer all the oldest documents to a box. When I’ve filled 6 boxes, I call a van and archive them. The data goes away and if I ever need it again, I know exactly where it is and can get it back in minutes, and then the clock starts ticking.

Measurable: But of Course! The Savings through cloud archiving are huge. The graph below shows a 5 year estimated cost model, based on a total of 50TB of data growing at 20% year on year.

This isn’t the most exciting step on the journey to cloud computing, but in terms of risk, impact, complexity and reward, it ticks all the boxes. Which is what we want to see!

If it’s excitement you’re after, then a small calculation will make you think- look at what you paid on storage for the last three years, multiply it by 58%, then when you look at the financial gain and what you could have achieved with it!

We all need a place to start when adopting a Cloud strategy and although we don’t all fancy chewing our way through an elephant, there’s no need to starve ourselves of the potential benefits of cloud service provision.

For more information Follow us @automatedintel
Find out more about Public sector Enterprise ICT at the Whitehall media event on 5th November 2013.

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