Power in Data: Turning Facts into Discoveries
Blog: Smarter CMO Solutions
Ric Telford - Ric Telford is Vice President of IBM Cloud Services. His professional business career includes 29 years of product and service development experience, and he is noted for bringing innovative approaches to the design and development of key technologies. In his current position, Ric is responsible for defining strategies related to IBM’s Services, including Cloud.

How to Exploit the Efficiency of Cloud Computing


Efficiency is what pays for cloud computing. Many Return on Investment cases show a cloud computing infrastructure can pay for itself in the same calendar year. As CIOs and IT folks realize, if you can get the return on the investment for a new IT project in the same year, the odds of getting the green light for such a project are greatly increased.

Where does the efficiency come from? Based upon thousands of cloud computing engagements over the past five years, we've found that organizations need to take a holistic view of what it takes to run a data center or, more specifically, the IT applications that power your business. It takes space (real estate), power/cooling, hardware (servers, storage, networking), and people (operators, administrators). A well-designed cloud computing strategy brings efficiency to all these areas, whether it is using a public cloud provider, or building a private cloud.

Here are some specifics:
  • Space: Data center space is becoming precious. Many companies' data centers are at capacity and are thinking about building new ones. Cloud computing allows a company to reverse that trend, by either consolidating the servers into one private cloud or moving the application to a public cloud provider. Either way, you save space and ultimately money if you can avoid acquiring additional real estate.
  • Power/cooling: As discussed, a private cloud is generally built by using a consolidated server rack. Blade-based systems are highly efficient and can also use more efficient cooling schemes (such as a rear door heat exchanger).
  • Hardware: Modern built-for-cloud systems have pre-integrated compute, storage, and networking features to maximize the efficiency of the hardware. They also rely heavily on virtualization, or the process of creating virtual instances of each application so they can be easily and dynamically provisioned when needed. This avoids what is commonly referred to as "over-provisioning," or an inefficient method for keeping servers running in case they are needed but running idle until they are.
  • People: A cloud is a highly automated system and with automation comes efficiency, or fewer IT staff people required to manage the same amount of applications. Clouds are also self-service, meaning the person who needs the IT service or application uses a portal rather than a person to fulfill the request. Think ATM vs. Bank Teller and you get the drift: A self-service ATM is a much more efficient way to get cash these days than going into a bank and using a teller.
How much efficiency comes from the cloud?

In Return on Investment (ROI) studies that we've done, certain workloads and applications can result in a 50 to 70 percent decrease in total cost when moved to a cloud-delivered model. This also generally results in an improvement in customer satisfaction, as users like the flexibility and self-service provisioning of the cloud model. This all sounds pretty good, but remember efficiency is only the start of the cloud value proposition. It is the things "Beyond Efficiency" that really help move a business forward.

IBM-InfographicRightRail.jpgDiscover more. Click to view our infographic on how the cloud drives business transformation.

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