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How organisations can realise the cost savings they were expecting from IaaS

Mon 15 Dec 2014
FYI, this story is more than a year old

As increasing numbers of enterprises adopt an Infrastructure as a Service (IaaS) model and are gaining tangible operational and business benefits, one of the key results they are also looking for is cost savings. However, “the resource allocation model is quite different in IaaS to that of traditional on-premises IT service delivery, and organisations have quickly realised that they cannot simply move their on-premises workloads to an IaaS service”, says James Knapp, ViFX Chief Technology Officer.

Challenges of moving to IaaS

Following a decision to move into IaaS, there is recognition that a whole host of additional considerations require attention. IaaS providers must be compared, and the differences between their propositions analysed; SLAs, cost models, contract terms, and penalty clauses. Circuits need to be provisioned or bolstered, along with estimates of how much additional bandwidth is required, without any real idea of traffic volumes. Some initial assumptions may need to be revisited, and where legacy operating system versions are not supported, some applications may have to be upgraded or patched before they can be migrated. Knapp says “At the end of all this, it is actually not that surprising if no-one gets round to considering right-sizing the virtual machines (optimising the allocation of CPU, memory and disk resources), or if they do consider it, there is generally not enough time left to do it prior to migration deadlines”.

Inefficiency is OK on-premises

With an on-premises model, infrastructure capacity supply must necessarily exceed demand to account for fluctuating IT activity and long procurement and provisioning cycles. The oversupply is also reflected down at the individual virtual machine level, where guest virtual CPU, memory and storage are provided in abundance because supporting processes to modify allocated resources are not dynamic enough, and resources are often 'squirrelled away' because application owners recognise the finite capacity of the whole system.

Inefficiency in cloud means cost

In an IaaS delivery model, this oversupply of virtual machine resources results in an inflated OPEX which quickly becomes a painful budget issue. It is not an unnatural reaction for an organisation to assume that "we will just right-size once we have completed the IaaS migrations". “However, our experience has shown time and again, that it is not necessarily that straight forward”, says Knapp. Even with a plan indicating which resources to shrink (or grow), unanticipated additional obstacles appear, such as the time, effort and hence cost passed on by the provider. And in some situations the result is that for some virtual machines, the payback period from IaaS efficiency savings versus cost to effect the changes turns out to be several years, making optimisation for those workloads understandably unpalatable.


“At ViFX we provide our clients with an IaaS Optimisation service, and it is amazing what a difference a bit of forethought and planning make”, says Knapp. Using data visualisation techniques, technical data can be coupled with billing information to ensure that the highest value optimisations are made the focus (thinking about the payback period). Also, developing and validating a process that is inclusive of the relevant stakeholders (especially enterprise application owners) and ensures service performance is baselined before and after the re-configurations, both go a long way. In our experience, if the project is run with these principles in mind it is possible to achieve OPEX savings of up to 40%.

Knapp says “At ViFX we're pleased to see a number of businesses embracing the Infrastructure as a Service model, and with the right assistance to optimise resources we're seeing organisations find significant cost savings, which they’re pretty happy about!”

To find out how ViFX can assist you to optimise your existing or planned IaaS solution, and get a free cloud strategy workshop, click here.

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