No matter what business sector, cloud computing is beginning to offer Infrastructure and Operations (I&O) teams a new way to support the business they serve. Now in addition to the standard model of paying for the cost of servers, network, IT staff, rent, electricity and air conditioning when a new service is desired, there is another option. I&O can consider whether a cloud-based solution where cost is based on value received is a better choice.

Many organizations, especially in the financial services sector, may choose to start with a private cloud where the organization is the only user, and the cloud runs on their premises. They will probably migrate to this private cloud over time as opposed to a wholesale cutover to the new virtual infrastructure. Since, many of their applications utilize a service-oriented architecture (SoA) they can phase this in service by service. Public cloud may also be utilized for testing purposes or to run functions such as customer service. This means that a hybrid solution where some applications run in the datacenter, some utilize private cloud and still others utilize public cloud may be the most realistic solution for meeting the needs of the business these functions serve.

When evaluating whether or not to utilized the benefits of the cloud, I&O needs to ask four questions to ensure that the promises made by cloud computing are actually fulfilled.

Will using the cloud enhance IT expansion at a lower cost?

In order to find the answer to this question, the I&O team needs to take a close look at the company’s existing IT assets. Identify any assets which are limiting the company’s growth. Calculate the cost of upgrading these assets internally, then compare to the cost of using a cloud-based service. Many times the advantage of cloud is described as move of capital expenditures to operational expenditures. This is not exactly correct. It is really more about cash flow and whether you pay now or over time.

One issue that often arises during the evaluation of an existing IT enterprise is whether the current enterprise is operating at its full capacity. Knowing this information assures that purchasing decisions are fully informed. Before I&O can accurately assess the cost of an upgrade versus transfer of a service to the cloud, an application performance management tool should be implemented. The best tool will include application dependency discovery, change and configuration management, operational resource monitoring, business transaction management and application performance monitoring.

With this information in hand, I&O can identify where existing resources are underutilized and where bottlenecks occur. Making a decision as to migrate services to the cloud based on a need for additional capacity should be leveraged on real application performance data and not on guesswork. Then and only then can real costs be evaluated.

Will using the cloud enhance Lifecycle Management?

The best way to answer this question is once again to utilize the information supplied by an application performance management solution (APM). Because APM identifies how resources such as applications are functioning, it can assist I&O teams in evaluating where resources are in the IT lifecycle.

APM can make it apparent that certain applications would benefit from a move to the cloud. Without this information, I&O can expect that moving an application to the cloud will meet the customer service goals of the business. Yet, I&O decisions should do more. They should also benefit the long- and short-term bottom line for the business.

How will I&O monitor Cloud activities?

Once applications have been deployed on the cloud, then a well-chosen APM solution becomes essential. Without a solution that can provide real-time 360 situational awareness and monitor every application whether it is on the cloud or in the datacenter, a business remains vulnerable to cascading failures that start small, but over time have the potential for considerable impact if unchecked. Considerable resources can be consumed in putting out the fires these issues ignite. When IT is hosted in-house without an APM solution, estimates suggest that 24% of the IT staff’s time is spent troubleshooting applications issues that have already caused enough impact to end users to generate service requests. In addition research shows that up to 10% of a firm’s gross revenue can be adversely impacted by application performance problems. This is quite a cost.

To attempt to provide quality customer service using cloud-based applications without using application performance management tools will inevitably result in a negative, expensive experience. It is essential that APM be in place, monitoring transactions, end-user experience, middleware messaging, and other aspects of the cloud and local IT enterprise constantly.

How will I&O maintain Cloud governance?

Once again the best answer is to implement application performance management tools. Governance includes everything from collecting historical application data and enabling dynamic queries, to detecting response time problems, bottlenecks, failures and application availability issues.

An application performance management solution should be able to determine the root cause of any failures and degradations that occur. It should then automatically alert the I&O team about any business impacting events it has detected. And it should have the ability to generate an automated response to resolve the issue detected. This will only happen if a complex event processing engine is controlling and automating the management of application performance.

I&O teams can only govern transactions that are visible. Application performance management provides that essential visibility. It provides inside into every application crossing through the multiple tiers of the IT enterprise, including integrated cloud applications. Whether the goal is to meet SLAs or maintain superior customer service, APM assures that every transaction is visible from end-to-end whether IT functions reside locally, on the cloud or on a hybrid of the two.