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TMNG Global Introduces New Cloud Value Model

TMNG Global Introduces New Cloud Value Model

Hidden cloud migration costs are still a concern for smart corporate executives

TMNG Global introduced a new proprietary financial model called the Cloud Value Model(SM) that allows corporations and executives to measure actual costs and benefits originating from migration to the Cloud. The product is able to provide thorough analysis on potential cost savings before, during, and after migration to the Cloud, allowing corporate executives to work out more precise strategic plans and adopt cloud-based solutions based on carefully estimated return on investment, according to Rich Nespola, TMNG Global’s Chairman and CEO.

For many companies, the inability to accurately determine costs is a significant barrier to Cloud adoption. This is particularly true as it pertains to the comparison of legacy IT costs to the costs of new Cloud services,” Nespola said in a press release. “Our Cloud Value Model(SM)performs a comprehensive five-year end-to-end lifecycle analysis of IT operations, systems and applications, thereby quantifying both the hard and soft costs and benefits of moving to the Cloud for our clients,” he added.

The Overland Park, Kansas-based company has developed a product, enabling enterprise customers to measure all expected benefits from cloud migration in real financial terms, based on assessment of current overall IT costs that are gauged against those costs during migration to the Cloud and afterwards.

Corporate executives would be glad to use such a tool in taking decisions on cloud solutions adoption after a growing number of managers realize there are hidden costs of deployment of cloud-based solutions that are able to hamper overall positive effect of cloud solutions adoption. When migrating to the public cloud, a company should be ready to face significant costs related to tweaking existing applications to be able to run flawlessly in the Cloud. Actually, most relatively older but widespread business applications are not completely cloud-ready, requiring significant investment in additional software development if a company wants to move existing business applications to the Cloud.

Another aspect of the same problem is related to integration between traditional on-premise systems and cloud-based solutions that often requires specific interface and protocols to achieve full compatibility. Thus, an enterprise would be forced to invest heavily in integration software to take utmost advantage of cloud-based systems that usually utilize latest protocol versions and rely on most recent technology. In fact, this scenario brings benefits in the long run for companies are forced to shift to the most modern solutions available but can be burdening from a budgetary point of view.

If a company is adopting an exit plan scenario that envisages return of backed up data and services back on-premises in case of cloud provider failure to deliver, those additional costs are to be planned in advance and included in the overall assessment of cloud adoption costs. A clever approach to cloud migration, however, requires never relying on a sole solution and be prepared for emergencies that occur in the cloud. Taken as a whole, the Cloud is more secure in terms of protection against power failures and subsequent loss of data and provides reliable backup options. Nonetheless, recent inability of cloud giant Google to restore diminished content of numerous users of its Gmail web email service shows that even leading cloud providers can experience serious troubles restoring data and information regardless of what actually triggered the problem.

A company might incur further hidden expenditures if its managers are not aware that the process of migrating large volumes of corporate data to the Cloud is similar, in theory, to using Appple’s iCloud web service to store music online but can be very costly in practice due to specifics of price determination in the Cloud. Imagine a scenario where a cloud provider charges only 1 cent per GB uploaded to its remote storage servers but the cost of download is set at 10 cents per GB. A simple calculation shows that if your day-to-day business process requires the download of vast data volumes from a remote server it would not be very advantageous to use such service. We are yet to see whether the Cloud Value Model(SM) is able to evaluate such expenses in a usable and proper manner but executives should be aware that many of the obvious advantages of cloud-based solutions could be wiped out if adopted without proper and thorough costs analysis.

By Kiril Kirilov

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