Friday, August 14, 2009

Who pays? How much?

Bernard Golden had another interesting point in his "Skinny Straw" article, which I referenced this past week: Some applications are going to require more bandwidth than others due to the amount of data transfer required. I/O-intensive apps -- or I/O intensive sections of a given app -- may determine what you can put in a cloud and what has to be colocated close to home. As noted in an earlier post, bandwidth is the key bottleneck to cloud computing, as opposed to the memory constraints that typify traditional processing.

I think what you'll find is that the same apps that would be "problem children" for the cloud are precisely those that are costing you too much in the first place. That's right, the bane of IT delivery organizations everywhere: legacy systems.

This would be a good time to talk about chargeback. The cloud provides another way of showing how much cheaper it would be if all business units used the standards that IT prescribes.

Imagine the impact on the enterprise when all the business units that take advantage of cloud computing received monthly invoices that showed the number of dedicated ports, then a cost per port, then a single line for every passthrough charge, and finally an allocation of headquarters tax. The business unit executive or one of his direct-reports would be able to understand it in a minute. And it probably wouldn't change much month-to-month.

Contrast that with the business unit that persists in using legacy systems that do essentially the same thing. Their invoices show unhealthy detail of hardware, software, labor, floorspace, power and network consumption. Depending on workload requirements, these costs might well swing drastically up and down from one time period to the next. The exec might even have to hire a budget analyst to manage this invoice; that would certainly eat into any perceived savings from staying on a legacy system because of "organizational" reasons (i.e., his people are too change-resistant to stay current).

We will absolutely have more detail on how the cloud simplifies chargeback. I know for a fact that some of my IBM colleagues are working on this as we speak. I'll pick their brains and give you a preview.

Have a better weekend,


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