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A post from Lauren Nelson, ROI, TCO, and Cloud Economics Track Chair at Cloud Connect.

Turnin’ it off is when you save — that’s Cloud Economics 101. The truth behind the promised savings comes from its pay-by-usage-without-contract billing model and is exactly what makes cloud a powerful technology. But often this core concept is lost in the evaluation of application fit. If you’re always powering up VMs but rarely powering down, cloud isn’t going to save you money. And this isn’t the only confusion around the cloud economics.

The ROI, TCO, and Cloud Economics track at Cloud Connect seeks to clear the fog by answering your biggest questions around these topics today. Not only will this track touch on Cloud Economics 101, but it will also provide a realistic ROI/TCO model for specific applications, share best practices and mistakes from cloud adopters, unveil lesser known cloud costs, and discuss the organizational challenges involved with creating a chargeback system for internal private cloud environments.

We’re starting off this track with Chris Pick’s “Understanding Cloud Economics: From Best Practices to Hidden Costs” session, to provide the overview of what every IT decision-maker should know about cloud economics today. Yes, basics are covered in the opening session but most of this session dives deeper, sharing best practices and highlighting some hidden costs associated with cloud deployments. Attendees will walk away from this session with a thorough understanding of cloud economics and how to measure the full cost of each cloud deployment. What caught my eye about this session? Chris’ proposal intro “Most IT departments are not getting the most out of their investments – as blindly buying cloud services won’t lead to substantial savings” — not something I expected from a vendor speaker but right to the point.

For those skeptics out there questioning cloud’s value-add (as presented by cloud vendors), this next session is for you. MGI Research’s Andrew Daley moderates this next session, “Bringing Cloud Back To Earth: A Panel Discussion”. Thus far, panelists include Rick Mickool, CIO of Wittenberg University and former executive director of IT at Northeastern University, and Joe Galuszka of Fulcrum Leverage, IT negotiations expert for cloud contracts. The combination promises to make for a lively session backed by real work examples without vendor bias. To get the most out of this session — engage during the Q&A section by asking panelists specifics… (re: Which workloads did you deploy to the cloud and will you be bringing any back in-house? What are some costly lessons learned?) … along with any other question that requires an unbiased response.

Conversation and best practice are great but what about hard numbers? If that’s your response to the first two sessions, this next one’s for you. This session not only looks at examples but also goes step by step to quantify benefits in terms of ROI and TCO, for today and the next 5 years. Rolf Harms’ “Sizing Up Cloud Economics: Doing More With Less” looks beyond the hype and cost reduction blanket statement, and delivers hard numbers and facts to help you justify your cloud investments to your own executive board. Want a teaser? Check out this speaker’s 2010 report, released by Microsoft, “The Economics Of The Cloud”.

The last session is the most unique session of this track and promises to be one of the most interesting sessions of conference by addressing one of the most common pain points faced in the private cloud realm: Chargeback. Despite widespread interest in private cloud environments, most orgs don’t plan to incorporate chargeback or any type of incentive system. But without incentives, it’s hard to get users to turn off instances when not in use. Some call it server sprawl — I call it the tragedy of the commons. And if you’re saying to yourself “she’s preaching to the choir” your big question is most likely — how much do I charge for my internal cloud? Bryan Semple’s track session, “Building Pricing Model For Private Clouds”, will cover everything from justifying chargeback to creating a the right pricing model.

All in all, we’ve got a great track planned that hits all the key topics and I hope to see you this Valentine’s Day for the ROI, TCO, and Cloud Economics track at Cloud Connect.

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