Cloud business planning

The business components of planning for cloud are paramount to the financial success of the endeavor. Cloud environments are designed to further business priorities by delivering more flexibility, lower cost, and more responsiveness. Thus, the business decisions of cloud drive many of the operational decisions.

Cloud business planning overview diagram

_{Back to top}

Estimating supply and demand

First, it is important to estimate supply and demand needs of the cloud environment, incorporating appropriate growth estimates. When virtualization was first implemented, people found that requests far exceeded their expectations for virtualized resources — precisely because there was pent-up demand. Cloud will only ease the procurement process and lower its costs, releasing more of this pent-up demand. Capacity elements can be anticipated once the cloud is up and running, such as:

• Over time, more and more of those existing workloads will move to the cloud environment
• There will likely be a queue of requests that can be immediately fulfilled by the cloud environment
• There will be more new requests than originally anticipated

In addition, IT should consider the possibility of using overflow capacity from a public cloud. Criteria for those decisions can include:

• Compliance requirements — both operational and regulatory
• Security requirements
• The complexity of configuration needed
• Proximity to large data sources (moving lots of data tends to be inefficient, both financially and practically)
• Splotchy consumption of resources
• The price of external resources

_{Back to top}

Financial costing of the cloud

After isolating the cloud services you can potentially send to the public cloud, it's time to investigate options and develop a relationship with a public cloud vendor. Map the appropriate services to your needs and run the financial calculations to ensure you're making sound financial decisions.
 This introduces the second element: the financial costing of the cloud. IT typically needs to have an idea of what things are going to cost. In the cloud, however, it's even harder to associate costs to the department that is incurring them (since there's no easy correlation between one physical server and one cloud service).

Even if IT cannot implement true chargeback (the billing of each department based on its usage), at a minimum it should be able to do "show-back" (the presentation of the theoretical bill, even if real money will never change hands). Consequently, during the planning stages, an organization needs to develop a costing model for the cloud environment, based on the organizations' own costs.
 With a chargeback model, users can see the prices for the services they are choosing in the service catalog. Indicating a price will change behavior of the user. Just knowing it takes three times (3x) the amount of money to support a cloud service with more resources will often drive people to select the less costly alternative.

Another benefit of costing is to demonstrate to IT leadership some of the costs associated with delivering the value of the cloud. Because IT always has to build out a cloud environment in advance of the requests for service, all investments are made before a departmental "purchase order." That investment is best justified with some financials on the current environment, including the cost of operation. Thus, planning around costing is supportive of a growing cloud environment.

_{Back to top}

Regulatory compliance

The third and final business planning consideration is one of regulatory compliance. Often considered part of ongoing operations, the regulatory status of both a private cloud environment and any public cloud resources utilized can have significant ramifications on the business. A key part of planning, therefore, is the identification of regulatory requirements governing certain workloads, and the creation of a plan for:

• Excluding them from any cloud environment – which has costly implications
• Developing rules and policies that ensure their regulatory compliance within the private cloud
• Identifying potential public cloud services that are in compliance with regulatory requirements

Together, these three components ensure that the priorities and needs of the business are designed into your cloud environment, along with the technology choices:

• Plan for demand and manage cloud service providers
• Define service costing and pricing
• Ensure regulatory compliance

_{Back to top}