Cloud services can save you money -- if you're careful

Determining whether using the cloud will pay off is an extremely complicated process.

By , Computerworld |  Cloud Computing

Since then, the university has deployed VMware's View virtual desktop software in-house and is about to start trials running the software on Dell's public cloud, and possibly others. Ferguson expects to have deployed all of the university's labs as virtual desktops hosted in a public cloud by 2014 or 2015, and to be saving around 30% over current costs.

The university closely tracks costs in order to be able to present current expenditures to vendors. For the virtual desktop project, Ferguson knows how many staff members support the current implementation, what the hardware costs and how much work it takes dealing with software patches. He also knows usage peaks and valleys, an important issue for a university and one that could help it save money by moving to a public cloud.

This data is extremely important when working with potential vendors, he says. "If I clearly articulate what it costs today, if they can't save me money, why do it?" he says. "If you can't articulate that, it's kind of hard to ask a vendor to do something for you."

One way that Northern Kentucky is making sure cloud services save costs is by pushing its vendors to offer true usage-based costing. Many vendors of SaaS services that Ferguson has looked at are trying to charge on a per-seat basis. But for a university, with its slow times during the summer and holidays, that pricing model doesn't make sense. At peak usage, the pricing would save money for Ferguson but on average, because of the valleys, the per-seat model ends up costing him more than keeping many apps in house.

That's a particularly important issue for Northern Kentucky's ERP system, which supports class registration. The system peaks when students are registering for class and then "flatlines," he says. While his group spends a lot of time managing the on-premises SAP implementation, "if I have to pay for the peak for an entire year, that's not very interesting," he says.

Also, the SAP system is one that the university can't take risks with because the software has to be totally available when students want to register for class. That means Ferguson is going to move that system to the cloud only when he's totally confident it won't fail. "We're going to accept less risk when it comes to those bread and butter systems," he says.

The calculation

To try to figure out the ROI of any of its proposed cloud projects, Northern Kentucky starts with an ROI calculator and research from Gartner, adapting it for the university's own special needs.


Originally published on Computerworld |  Click here to read the original story.
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