We talk to a lot of customers about their journey to the cloud. We have been seeing a shift in these conversations and many customers are moving from a “Cloud First” strategy to a “Cloud Smart” strategy. They are starting to realize that blindly moving everything to the public cloud was not the most (cost) effective solution. That’s why a 2018 IDC study shows “80% of IT decision-makers surveyed said they had repatriated workloads during 2017-2018, with the number only rising in estimates for the following year”. AWS’s CEO Andy Jessy is talking about Hybrid Cloud during his AWS re:Invent keynotes, and every public cloud vendor now has a hybrid cloud solution and a VMware Cloud offering to extend on-premises VMware infrastructure seamlessly and consistently into the public cloud.

With the shift of all-in public cloud to hybrid cloud and multi-cloud, a Total Cost of Ownership (TCO) comparison is often used to steer the discussion into a specific direction. Unfortunately, we see a repeating pattern of “blind spots” during these discussions resulting in a twisted or incomplete conclusion that’s best summed up by “it’s too expensive”. The fundamental reason for these blind spots, is modern cloud economics require you to look at things a bit differently. Typically, a cloud economics discussion around any of the hyperscale cloud providers includes the following benefits:

  • Value at a lower TCO
  • Economies of scale
  • Pay-per-use
  • Increased flexibility
  • Workload arbitrage (workloads are dynamically placed in the environment with the most cost-competitive infrastructure at the time)

These are all valid points but for customers to realize these benefits, they first must deal with these blind spots:

Rework

The cost (time, money and effort) of Rework. Replatforming and refactoring applications can consume months or even years. An IDC study across 418 companies across the globe showed companies pay an average of $ 1M for 1000 VMs during a 3-year effort.

VMware Cloud creates a consistent hybrid cloud infrastructure with consistent operations across on-premises data centers and public clouds. This prevents Rework of your applications and allows you to move to the cloud with speed and confidence, using the same VMware tools and skillsets you already use on-premises. You can migrate to the cloud quickly, simply and with zero downtime. This minimizes time, cost and risk.

Reskill

Moving to a native cloud means you need to Reskill your workforce. The required skill set, tools, and operational processes are completely different. In a team of 25 FTE and an average cost of € 8K for training, which is conservative, your costs are € 265K.

VMware Cloud protects your existing skills-acquisition investment with minimal productivity loss, as well as eliminating the hiring time-lag. If your admins know their way around a VMware data center, there is no need to Reskill your staff.

Remand

A native cloud is effectively an operational lock-in. If you ever want to Remand your workloads and move away from a specific native cloud, the Rework and Reskill costs apply again. This goes against the multi-cloud “hype” the market is talking about. There is no out of the box portability across clouds for your workloads. Even if you stick to the lowest common denominator cloud services, such as compute, there is no seamless migration. An AWS AMI cannot run on Azure without rework, for example.

Because VMware Cloud creates a consistent infrastructure across data centers and public clouds, you can easily Remand your workloads back to the on-premises data center or to a different public cloud.

Repay

Companies often underestimate the type of change how things are paid for in the cloud. The forecasted OpEx costs after a large-scale cloud migration are most often way off target. The network egress[JK3]  costs, for example, can easily overwhelm expenses if traffic flows are unpredictable or if the underlying architecture changes (from public to hybrid or to multi). Finally, the administrative cost of keeping a native cloud or on-premises data center environment up and running is also greatly underestimated. According to a Gartner study, 80% of the IT budget is typically spent on just keeping the lights on.

The consistent infrastructure across environments of VMware Cloud delivers better predictable traffic flows and if you integrate traditional workloads running on VMware Cloud on AWS for example, with native AWS services, no egress costs are involved at all. Traffic between VMware Cloud on AWS and native AWS services flows over an internal, low latency 25Gbps link, completely free of charge.

VMware Cloud is a fully managed service so VMware admins can spend their valuable time on projects that contribute to the business. No more patching, upgrading and troubleshooting your infrastructure! VMware Cloud makes the underlying infrastructure ubiquitous, so you can focus on what’s important to your business.

VMware Cloud on AWS Total Cost of Ownership calculation

Our highly skilled and certified VMware Cloud and Cloud Transformation consultants are closely aligned with cloud economics teams at VMware and AWS. In a triangulated approach, ITQ can help you build a detailed TCO analysis of your current infrastructure and, using a tried and tested & trusted model, we deliver a detailed comparative TCO analysis for a VMware Cloud solution that includes possible annual savings by running VMware Cloud as opposed to running and managing your own infrastructure on-premises.

If you are looking at a major hardware refresh in your infrastructure, upcoming lease terms for your data center facility, or any other upcoming event that requires you to think about the future of your IT infrastructure, the ITQ “VMware Cloud TCO Analysis Service” will help you get the data you need to make a sound, and facts-based decision.

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Jeffrey Kusters

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Field CTO and double VCDX #252 on Data Center Virtualization and Network Virtualization.

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