Cloud Cost Governance and Portfolio Optimization

The tasks and challenges of the Cloud Center of Excellence (CCoE), also known as the Cloud Competence Center, are manifold. It acts as a central group that is commissioned to guide an organization as a whole through the process of Cloud Transformation. According to Gartner (2019), the CCoE holds the cloud computing governance function and serves as an internal cloud service broker. It also acts as a point of contact for advising stakeholders such as IT departments or cloud service consumers and is tasked with driving cloud transformation forward.

In a preceding post, we already presented the core tasks of the CCoE and the arguments for organizations establishing a dedicated team. If you are unfamiliar with the core tasks of the Cloud Center of Excellence we encourage you to read our article on "The 7 Core Tasks of the Cloud Center of Excellence" first!

In this CCoE Feature blog post series, we take a closer look at seven CCoE core tasks and show you how our Cloud Transformation Platform helps you to execute them. Let’s have a look at the CCoE’s second core tasks.

Cloud Cost Governance and Portfolio Optimization

Choosing an efficient way for cloud governance to manage and cost optimize heterogeneous cloud environments is an important task to streamline your cloud project. This is essential during the planning phase, but also after the transformation when operating a hybrid IT or multi-cloud landscape. The keyword here is “right-sizing” all services according to their actual consumption.

Using Txture, the CCoE can perform Cloud Cost Forecasting and Cloud Cost Optimization for individual applications and the entire cloud portfolio. In case that OPEX and CAPEX costs for components of the existing on-prem infrastructure are available, Txture compares these on-prem costs of an application with the OPEX costs for potential cloud deployments and makes a Business Case Calculation for migrating an application or a whole portfolio. In doing so, Txture can also take into account discounts for reserved instances. This, of course, helps you to make the right cost optimization decision, but also saves you a lot of time!

How Txture does Cloud Cost Forecasting

Txture calculates the expected costs for different cloud providers and service models like IaaS, CaaS, PaaS or SaaS. In order to do so, Txture maps information about your current IT landscape with cloud product information from Txture’s Cloud Knowledge Engine with over 100.000 entries.

Cloud cost forecasts are always calculated based on up-to-date prices and for the latest cloud products. The Cloud Knowledge Engine is continuously growing and contains prices, host locations, certifications and mappings with on-premises legacy services.

For the Cloud Cost Forecast Txture automatically takes into account cloud product instance sizes and configurations based on your current IT infrastructure data and consumption. To make cost forecasts even more precise, parameters like runtime, storage or backup settings can be adjusted for right-sizing your target architecture.

Txture allows to compare cost forecasts for a variety of cloud providers and service models.

How Txture does Business Case Calculation

In Txture, on-prem costs can be calculated based on OPEX and CAPEX application infrastructure costs. The cost of the technical and virtualized infrastructure can be weighted and aggregated on an application or even business capability or business unit level. Finally, Txture compares on-prem with expected cloud costs and estimates the business case of migrating an application or a portfolio of applications.

This way, members of the CCoE can make more precise decisions about which applications lead to quick return on investments and therefore should be migrated at an earlier stage. Moreover, it helps identifying applications for which a cloud strategy does not implicate any financial benefits.

Report showing on premise vs cloud costs and cloud cost savings per application per month - not all applications implicate financial benefits in a cloud deployment.

In a next release, Txture will also be able to analyze infrastructure utilization and make suggestions to right-size your cloud services.

Our series on the Cloud Center of Excellence has just started. Come back to read our third installment of this series. The next post about the CCoE and Cloud Transformation Management and Reporting will come soon!

Do you already want to know more about Txture's Cloud Transformation Platform and want to discuss how Txture can facilitate the cloud journey of your organization? Feel free to get in touch and book your own demo session!