As the way that customers are using cloud computing matures and its importance to their overall IT strategy increases, there is more focus on having visibility into cloud service consumption and costs. And, with cost savings being one of the main reasons that many companies move to cloud in the first place, it makes sense that there would be this focus on knowing the true cost of cloud services and ensuring real value.
For service providers, this means developing capabilities to be able to accurately measure and charge for cloud resource consumption. Being able to bring together all of the cost related data – both fixed and variable – and allocate it appropriately, then generate usage reports by tenant and service level provides the transparency that customers are looking for. And, when these usage reports are integrated with the invoicing system, automated and accurate billing can occur.
The benefits to the customer of cost transparency are obvious – it provides peace of mind that this cloud thing is not just a smoke screen for increased IT spend. They can also do analysis to reduce any low value, high cost cloud services or use the cost data to make decisions about which workloads should or should not be moved to the cloud. This cost visibility also enables the service provider to offer customers flexible pricing models with options covering one-time, recurring or usage-based consumption of different cloud services.
Providing cost transparency is good for the service provider as well. By showing the customer the different components that make up the cloud service, the cost differential against pure unmanaged infrastructure offerings in the public cloud can be more easily justified. This cost transparency approach helps to monetize value-added services such as monitoring and compliance – instead of these being added to overhead. Service providers can also use cost data to make better operational and service design decisions and automated billing increases staff productivity.
Overall, this transparency into cloud service consumption and costs strengthens the service provider – customer relationship. Delivering cost visibility is one way that the service provider can ensure the customer recognises the true value add that they are providing and develop a more ‘sticky’ and long term customer portfolio as a result.
For more on BMC Cloud Management for service providers, go to: www.bmc.com/cloud/serviceproviders