Libor Bešenyi (CTO)

The benefits of cloud are well known and their significance will grow over time. However, our decision must be subject to economy and most companies struggle with the calculation of prices of cloud-based solutions. It is not easy to create ROI for the potential migration of complex business systems. We will continuously address this issue and we will now start with a simple example of using data repository.

We will proceed in the following manner:

We will also think about what is the impact of "cloud“ philosophy on pricing and we will find out that this mental exercise put on the shoulders of IT (resistance reason) has a positive impact, especially for other departments of business (such as the finance department or marketing).

Aim

The aim of this experiment was to create cloud storage for photos with an emphasis on working with files (security and authentication were not so important) and to find out the cost of operation of such application.

Let’s imagine that we have a mobile application where our users collect photos. These photos need to be sent to the server and have possible access to them via web interface.

Selection of cloud provider

Before we can calculate the price for cloud services, we must know what cloud to choose, what is the price quotation and what are the technological possibilities. We are going to focus on the cloud from Microsoft (Azure).

Most managers get shivers from the cloud because the price is not readily predictable. Every CFO needs to be able to estimate the cashflow. However, CIO cannot tell how much resources will be needed.

1. If you migrate an existing system to the cloud, we need to do an audit (so that undue funding expectations don‘t kill other activities and efforts of work with the cloud)

2. If we deal with a new product, the business and finance department must set up SLA (which paradoxically makes it easier for IT managers to explain why systems work so slowly in the event of an increased demand for services, and not accepting increases in the cost of the finance department)

Calculation of resources (power / capacity / throughput) in a complex system is not easy, but that does not mean it's impossible. IT managers can facilitate the work and purchase powerful hardware for tens of thousands of euros while huge amount of performance waits for the "potential" onslaught. Cloud forces IT managers to these audits or forces business unity to think about the profitability of products, and this causes slight resistance of companies in the migration to the cloud.

In our case, we need to know everything that we will pay for the cloud from Microsoft and, accordingly, we can analyse our needs: