VMware: How to Calculate and Assess Your OpEx

Operational cost improvements can be very hard to measure if you consider your operational cost as a ‘sunk’ investment (X Full Time Employees (FTE) per year at $Y cost). How can you measure the improvement in automation of a particular service and then pass those benefits onto your customer? As a competitive analyst, I can see a trend occurring where the lack of investment in understanding operational cost per unit is starting to affect many cloud providers maintain competitive pricing. To negate the cost impact, they wrap more and more ‘managed services’ around the problem which does not eventually help. This will over time compound the situation; where there are more services across multiple clouds, the margin is lower, there is increased risk that operations are not able to cope, they will eat into these margins when mistakes are made. In fact, the irony of this is that it is one of the reasons customers go to cloud providers in the first place; to take the inefficiencies off their hands so they can focus on the business. When the inefficiencies become the focus this creates a problem.

Is cheaper licensing the right approach? Everyone wants something for ‘free’ or as cheap as possible, but nothing really is, in this context the cost is pushed into operations when using ‘good enough’ products, that 99% of the time are running over capacity in any case. My advice is to conduct an operational assessment of these products and see how they match your existing investment capability, many lack features or integration that impact operations, however, the gap is constantly closing. All vendors are building support for multiple clouds, increasing automation and orchestration to provide customers a more compelling service. Foundations are important, whilst many strive to do ‘everything’ there is strength in focus and building on solid, stable, industry proven solutions.

Read the entire article here, How to Calculate and Assess Your OpEx

via the fine folks at VMware!