CFOs: Use the Cloud Now

It occurred to me that there's an easy way for CFOs and CEOs to use the cloud right now, without waiting for the IT department to touch a single piece of equipment. Here's how:

Ask your IT department how many servers and how much data you have. (Ask how much data is actually being used, not how much capacity you have.) Then, go to Amazon's site for cloud services and calculate how much it would cost to host that on Amazon. Finally, call in the CIO and ask her why your IT infrastructure budget is a lot higher than what it would cost to host on Amazon. It will be. You're asking for the whole infrastructure budget, not just the cost of the equipment.

For example, suppose you have 460 Windows servers and 200 TBs of data. Amazon has different prices for different size servers, but start by assuming all your servers are what Amazon calls "large". Your annual cost for that (October, 2010) is $2.5M. That includes 400 Mbps of network traffic into and out of the data centre 24 hours per day.

Ask your CIO out what services you're getting that justify the premium you pay for having an in-house IT infrastructure department.

In reality, you're CIO's no dummy. She'll be able to give you a pretty good story about why the IT infrastructure budget is so much. That's when you can use an independent IT consultant who's not owned by a company selling the infrastructure that drives up your costs. The real value comes when you start to use the benchmark cost of Amazon to identify and drive improvements in the value provided by your infrastructure department.

For example, when your CIO is talking about the services she provides, ask her when she's going to offer servers that can be spun up by a user, through a web site, with no intervention at all from the IT infrastructure group, like on Amazon? Or when the business will be able to downsize how much it's paying if it discovers that it doesn't need a large server, like on Amazon? Or when you'll start paying only for the data storage you're using, and not for a bunch of empty disk that you had to buy for "future growth", like on Amazon?

And that's how to use the cloud without changing one piece of technology.