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Seven practical steps to help you run your on-premise cloud like a business

By John Novak of Apptio, and David Butler of Eucalyptus Systems, special to Network World
June 29, 2012 03:17 PM ET

Network World - This vendor-written tech primer has been edited by Network World to eliminate product promotion, but readers should note it will likely favor the submitter's approach.

Long regarded as "just" technology providers, IT organizations now are routinely called on to leverage infrastructure advances and virtualization in order to drive efficiencies, improve performance and transform business functions throughout the enterprise. Yesterday's technology providers must become tomorrow's IT service providers, agile business partners able to provision resources efficiently and effectively in response to the changing needs of the enterprise.

Transitioning to "IT as a service" is easier said than done, as IT pros find their progress limited by a variety of significant constraints including VM sprawl, delays with resource provisioning, variable resource demands, complex configuration requests, and the ambiguities of Shadow IT. These challenges overlay persistent pressure for IT to "deliver more with less" while under increased scrutiny to prove ROI.

ANALYSIS: What the cloud really means for your IT job

As we see it, the solution has two parts. First, any IT organization that wants maximum agility and self-service while still maintaining its existing physical, virtual and heterogeneous IT investments in a secure fashion, must implement an on-premise cloud.

Second, that on-premise cloud must be run like a business. Given the strategic impact of technology to both the top and bottom line of a company, it makes sense to monitor performance and drive transparency into the total cost of delivering each IT service. You can also improve agility by automating and continuously managing the budget, forecast and planning cycle of IT.

Here is a seven-step plan to help get you there.

1. Baseline your current cost and quality of service. Before you can justify any on-premise cloud initiative you'll need to accurately determine your existing IT costs and consumption metrics. Maybe you have a hunch you're not fully utilizing infrastructure? Could you be over- (or under-) investing in certain areas? By benchmarking versus third-party cloud vendors and outsourcing options you'll establish a baseline and uncover where to focus initial efforts. In addition, analytics geared toward "what-ifs" and scenario planning can help tease out additional concerns regarding security, internal costs and investments, open source technology needs, etc. Ultimately, you must be able to cost out internal IT products, identify areas where cloud could potentially help and then eventually, measure the ROI of the transition to ensure projected cost savings become reality.

2. Define on-premise cloud services with pricing and SLAs. An on-premise cloud allows IT organizations to leverage existing investments in hardware, construct hybrid clouds and enable end-users within the business to self-provision. Start by identifying those applications and IT services ready to move into the on-premise cloud. Consider:

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