Seven Practical Steps to Help You Run Your On-Premise Cloud Like a Business

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4. Enable consumption-based billing for your on-premise cloud. The successful transition to an on-premise cloud requires you to know, on a monthly basis, how much IT is consumed and what that amount of consumption costs. Consumption based billing enables a fair and defensible IT chargeback or showback process by delivering a summarized "Bill of IT" to your on-premise cloud customers on the cost, quality and value of the IT services each customer consumes. The Bill of IT, like a cellphone bill, details the services being consumed and the cost of those services in a language your customers understand. Consumption-based billing also improves transparency, provides cost, quality, and value levers to the business, and ultimately builds trust between IT and the business.

5. Balance business demand with capacity. Agility requires responsiveness to the demands of the business, and you'll need to know how the system functions from both a supply and demand perspective. As demand increases, will you have the capacity to respond? Do you need cloud-bursting capabilities to ensure business continuity and flexibility? Honing in on the appropriate demand management equation allows you to adapt as demand scales monthly and seasonally with consumer behavior, and it leads to the agility now required to stay competitive in today's volatile business environment. Let's face it, most virtualized data centers are under-utilized, and it can take days, weeks, or even longer to allocate and provision a virtual machine. An on-premise cloud offers flexibility, agility and automation so you can optimize utilization and reduce costs.

6. Scale your on-premise cloud with support for hybrid clouds. If demand exceeds capacity, you'll need to enable your on-premise cloud to "burst" out to hybrid clouds to ensure business continuity and agility. Fortunately, because on-premise and public clouds share a common API, transitions like this can occur seamlessly via tools you have always used, with little or no modifications. In other words, when you need more "horsepower" for a particular application, you can move workloads between clouds with no change to business processes you already have in place.

7. Manage ongoing business performance. Once you understand the cost structure of your on-premise cloud, aim for a quick win so you can move on to adding more services and more compute. Your goal is to deliver the right service at the right price, and ideally, to deliver IT as a service (similar to a utility). Set targets and timeframes for realizing ROI and measure results objectively so you know projected costs savings are achieved. Then, plan for process improvements and additional cost efficiencies to follow.

The IT economic environment is moving to an ultra-centralized, dynamic, shared infrastructure with high return on capital and a fundamentally indirect cost structure. Accordingly, more IT organizations are realizing they must leverage infrastructure as a service and use cloud providers for surge capacity, shifting IT into a much more variable cost structure that can be planned and managed. Any IT organization that wants maximum agility and self-service while maintaining its existing physical, virtual and heterogeneous IT investments in a secure fashion must implement an on-premise cloud. And, in order for that on-premise cloud to be effective, it must be run like a business.

Novak is senior director of strategic marketing at Apptio and David Butler is senior vice president of marketing at Eucalyptus Systems. Eucalyptus Systems is the creator of the most widely deployed on-premise cloud computing platform, and Apptio is the leading provider of Technology Business Management (TBM) solutions. Together, they are joining forces to help companies seamlessly manage cloud computing transitions.

This story, "Seven Practical Steps to Help You Run Your On-Premise Cloud Like a Business" was originally published by Network World.

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