IT cost management and the cloud

Industry analysis by Beth Schultz, plus the latest news headlines.

Cloud computing promises to provide quality IT services at a lower cost and more quickly than perhaps traditional IT delivery methods. But that might not always be the case, according to Apptio, which this week updated its IT cost management software with tools to help enterprise IT managers determine if they should invest in the cloud.

IT cost management must: Chargeback 
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Apptio this week added to its hosted IT cost management service the capabilities needed to determine the total cost of cloud. The company included in its Cost Transparency Templates the necessary metrics to calculate how much less – or more – an investment in cloud computing would be compared to other approaches, such as using in-house resources. IT managers hoping to operate as internal service providers could determine the cost of every approach and become transparent to the business, reporting exactly how budget dollars are invested, according to Jeff Day, director of marketing at Apptio.

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Cloud computing promises to provide quality IT services at a lower cost and more quickly than perhaps traditional IT delivery methods. But that might not always be the case, according to Apptio, which this week updated its IT cost management software with tools to help enterprise IT managers determine if they should invest in the cloud.

IT cost management must: Chargeback 
Watch a slideshow of this product

Apptio this week added to its hosted IT cost management service the capabilities needed to determine the total cost of cloud. The company included in its Cost Transparency Templates the necessary metrics to calculate how much less – or more – an investment in cloud computing would be compared to other approaches, such as using in-house resources. IT managers hoping to operate as internal service providers could determine the cost of every approach and become transparent to the business, reporting exactly how budget dollars are invested, according to Jeff Day, director of marketing at Apptio.

“We see that cloud computing is going to change the way that IT leaders think about how they manage IT. The demand is on IT to become a service provider to the business and cloud changes that discussion,” Day says. “Cloud provides scalability and elasticity, a shared resource that can be metered by usage and the business will demand that IT has chosen the best business option for the current need.”

That means IT managers will need to be able to show that they understand the cloud and have explored it thoroughly as an alternative to other internal or outsourced computing options. Apptio, with its recent release, delivered integrated cloud cost analysis for each of its Cost Transparency Templates, which the company says will allow IT to compare baseline costs with cloud offerings.

Apptio provides its technology via a hosted application. The application includes a visual modeling environment that pulls data from spreadsheets, general ledger systems and other sources. The application creates a model of the relationships between IT services and costs. The included analysis capabilities can also test what-if scenarios and plan for capacity. The pre-built templates analyze costs associated with application, infrastructure and desktop services.

“Customers are getting a lot of pressure from the cloud. With these templates, they will be able to show the true [total cost of ownership] and [return on investment] of the cloud,” Day says. “The greatest inhibitor of the cloud is a lack of understanding. IT leaders need better systems and tools to perform accurate analysis.”

Customers can get started with Apptio’s cost analysis technology for about $100,000 per year, which includes the cloud computing templates and analysis tools as well as baseline TCO analysis capabilities.

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Schultz is a longtime IT journalist. You can email her or find her here.