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Apptio Quantifies The Cost Of Cloud Services

The theory is that cloud services can save on the bottom line. Apptio's upgrade of its Technology Business Management (TBM) platform lets organizations test that theory. The software platform allows IT to compare the total cost and quality of private and public cloud services by answering questions such as "What services are being consumed?" "How can I increase my utilization rates and lower costs?" and "Should I use cloud?" In short, IT can put a number on the savings from purchasing a cloud

The theory is that cloud services can save on the bottom line. Apptio's upgrade of its Technology Business Management (TBM) platform lets organizations test that theory. The software platform allows IT to compare the total cost and quality of private and public cloud services by answering questions such as "What services are being consumed?" "How can I increase my utilization rates and lower costs?" and "Should I use cloud?"  In short, IT  can put a number on the savings from purchasing a cloud storage service vs. keeping storage locally, or for that matter, any other cost comparison that's required.
 
Talk about effective service cost quantification should make any IT manager perk up. Private and public cloud deployments are notoriously hard to quantify. Platforms that can put a hard number on services should find welcome amongst IT pros looking at delivering IT applications as services.

The Apptio TBM Solution Stack consists of five software modules: Service Costing, Bill of IT, Budgeting and Forecasting,  Service Quality and Utilization, and IT Benchmarking. Each runs as a SaaS application and uses data and information comprised from both external services and internal systems. Internal data is gathered from financial systems, VMware's vCenter, and other corporate repositories, anonymised, and then is sent up to Apptio for analysis.

External data is provided in what Apptio's recent addition, called Cost Transparency Templates. Each template is a collection of best practices developed by Apptio, incorporating data from public cloud comparisons around the industry. The templates include statistics such as costs for server and labor,  utilization models, performance indicators and other metrics.

Apptio shared some of that information with Network Computing for the first time. The information included statistics such as:

  • The per user cost of deploying SAP to 1000-5000 users run at $2200 /yr
  • E-mail cost per user for 7,500-20,000 accounts runs  at $35 /month
  • Tier 1 (SAN) on average runs $6.90 /GB/mo
  • Tier 2 (NAS): $4.10 /GB/mo
  • Tier 3 (archive): $1.90 / GB/mo
  • LAN cost per port for 10,000 devices on average run $140 /year
Apptio claims that corporations who've adopted its technology have realized significant savings, but could not provide any customer comments at press time. One company they were willing to use as an example, Starbucks, used the technology to realize a 50 to 75 percent savings by discovering that there were on average 1.6 devices per user, says Jeff Day, Apptio's director of marketing. Another organization, claims Day, used the Apptio platform to identify that email was being kept on tier 1 storage. They realized a 60 percent cost reduction by moving to NAS storage.

Apptio charges for the Technology Business Management (TBM) platform on an annual basis, and depending on the individual application selected. General pricing is quoted at $150,000 per year, but according to Apptio, the bill of IT pricing is dependent on number of users and data integration points, and starts at $50,000 per year. Service Costing depends on the number of domains and number of units within a domain. A single domain can start as low as $50,000 per year.

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