These two activities together result in fewer, more strategic applications that are more modern and can be run at a lower cost per application. Here’s how it happens.
Cloud allows you to select the price you want to pay by opting for services you would like to avail. This is a typical Starbucks model - if the only thing you want is a Straight Black Americano that's going to cost you £2. If on the other hand you want a Venti Soy Chai Latte with Almond milk then you pay £5.80 – a premium for all the add-on services. The same model works for Cloud. To arrive at a Cloud price, you look at what your core application complexity is and what your non-functional requirements are, what SLAs you need, and then what is the Cloud model you are looking at.
In an on-prem model, you buy for the peaks and worry about returns, whereas Cloud gives you the flexibility to buy for the valley (the lowest requirement) and scale to the peaks as needed. This way, you can adjust for changes in core complexity, non-functional requirements, and SLAs for each application.
For instance, one of my clients was a leading credit-rating company and had a data centre in the UK. It was an exceptionally robust, secure, and resilient data centre and cost a lot to maintain. And so, any application that was hosted there, no matter how trivial, had super resilience and cost a fortune. The question is, do you want all your applications at this level of resilience, or could you move the non-strategic ones – like facilities management, conveyance etc. – to the Cloud?
Usually, in an Enterprise environment, there isn’t in-depth granularity on how apps are managed. Mostly with a “pack the rucksack” model of bundling as many applications and workloads together as possible, which is heavily influenced by traditional capital asset- utilisation considerations, low-value applications get clubbed together with high-value applications. And as a result, they get the same level of service as a strategic app. This additional service is expensive and not required for a low-value app. Breaking this model and getting to a hyperscaler Cloud can ensure application services much better tuned to the value and needs of each application without the added consideration of infrastructure or middleware expenses.
The ambitious vision: a low cost, low risk, future-ready application landscape
Which CIO wouldn’t want an over 30% reduction in application costs while retaining the app performance and reducing risk? The two-pronged approach outlined above, along with the risk discussions in the previous articles makes this ambitious vision possible.