From narrowing cost disparities to Generative AI, there are number of reasons why today’s companies are taking a hybrid approach to their IT network infrastructure and utilizing more private cloud services alongside their public clouds. Forrester’s research indicates that 85% of enterprises use a hybrid cloud strategy. That means companies need to handle their expenses with the ability to track and allocate costs for both public and private clouds. Moreover, they need to watch for tipping points, knowing when it’s more cost effective to use a public versus private cloud strategy.
But to gain that insight, you must have full observability into cloud costs.
Thanks to Tangoe, that just got a lot easier.
Private, Public, and Hybrid Cloud Expense Management
Today, we announced private cloud expense management, expanding our public cloud visibility and control features for private cloud services from VMware®. Businesses can now track and allocate costs for their hybrid cloud infrastructures, thanks to enhancements made to the Tangoe One Cloud solution. Tangoe’s new capabilities unite all direct and indirect private cloud costs into one view to deliver the visibility and automation necessary to more effectively manage cloud spend, including both virtual and physical server costs.
Clients using VMware private clouds now have the ability to:
- See the “fully loaded” cost of their private cloud deployments, bridging siloed information to summarize all associated costs in easy-to-understand data visualizations.
While public cloud expense management platforms are built to handle only virtual machine costs, Tangoe’s new private cloud expense management platform goes deeper, handling both virtual and physical expenditures:
–Virtual machines or virtual server expenses: virtual infrastructure such as software and network components
–Physical server expenses: hardware used for storing, retrieving, and sharing data including file servers, print servers, application servers and email servers
–Data center expenses: utilities, labor management costs, and software licenses
- Drive chargeback processes, effectively allocating private cloud costs to departments and lines of business — the same way they already do for their public cloud costs when using the Tangoe One Cloud solution
- Get a holistic view of both private and public cloud spend in one place with the ability to compare which strategy is more cost effective, digging deep into the granular cost breakdowns for both service types
“Innovation thrives when organizations have transparency into their cloud estate, enabling them to harness insights for cost reductions and more strategic investments. As a frontrunner in multi-cloud visibility and automated hybrid cloud expense management, Tangoe empowers companies to elevate and extend their cloud innovation,” said Zeus Kerravala, Founder and Principal Analyst at ZK Research, in response to Tangoe’s announcement.
A Look at the Total Cost of Ownership of Private Clouds
Hybrid Cloud Expense Management: Why Tangoe’s Offering is Unique
The market is flooded with cloud cost management software and point solutions that solve only a narrow set of needs. Whereas our competitors fail to provide cloud cost allocation features altogether or lack cost allocation features across both public and private clouds, Tangoe addresses these use cases. We help CFOs, FinOps professionals, and CIOs uncover recommendations to improve cloud resource utilization and lower costs. Plus, the solution works with on-premises and colocation private clouds as well as private-only environments.
These are powerful tools for global systems integrators, managed service providers, value-added resellers, and technology advisors. They can leverage Tangoe’s new hybrid capabilities to support the efficient management of complex, multi-cloud environments. This is important at a time when “cloud sprawl” has companies and their strategic advisors overseeing a wider variety of service types distributed across a longer list of cloud service providers and hyperscalers.
Observability: The Challenges of Seeing and Tracking Private Cloud Costs
Tracking the all-in costs necessary to deliver a private cloud network isn’t easy for companies due to manual processes, human errors, and a myriad of ancillary expenditures related to:
- Data center facilities and their utilities expenses
- Storage and network hardware including both virtual and physical servers
- Software licenses and labor costs known as cluster management fees
In contrast, gaining visibility into public cloud costs is simplified by an all-in-one service with built-in tools that the client doesn’t have to own and manage, as well as a mature market of solutions for purchase.
“With private cloud costs, many CIOs are left staring into a black box. Even IT engineers struggle to put all the parts and pieces into spreadsheets, trying to figure out which costs are related to which projects. Tangoe untangles the mess by clearly mapping information and tying costs to projects, departments, and lines of business,” explained Paolo Sellari, Sr. Product Manager, at Tangoe. “This makes for an eye-opening experience when Tangoe reveals our clients’ private costs for the first time. Most have never seen this information before and had no idea of the depth of transparency made possible through API integration with VMware.”
Cross-functional collaboration is also key in bringing together all the necessary datasets. Invoices for private cloud services are often sent to one person, meanwhile facility invoices for power and water are owned by someone else. Rather than having to wrangle all the information, Tangoe’s full menu of supporting services offers the comprehensive administrative support that overburdened IT teams need to collect all the data.
Why Cloud TCO is Increasingly Important: GenAI and Narrowing Price Disparities
While stubbornly challenging, tallying the total cost of ownership (TCO) of a private cloud is growing more important today as CFOs and CIOs evaluate the most cost-effective approach for their network infrastructure. Four key trends are driving renewed interest in better understanding and managing the financial outlay of a private cloud:
- Narrowing Price Disparities: While bringing advantages in security and compliance, private clouds have long been known to be more expensive than public clouds. But now price disparities between private and public are narrowing as public service prices increase and private hardware prices decrease.
- Generative AI: GenAI’s high reliance on scalable cloud technologies is driving innovation costs up and poking IT executives to make important decisions between public and private as they decide where GenAI workloads should reside.
- Digital Transformation ROI: Many companies invested unguardedly in cloud technologies over the past few years, but now executives are tightening their belts with more rationalization — wanting to know how previous investments have paid out in the way of financial returns and business value.
- Cloud Repatriation: The trend of companies moving workloads back to their own data centers makes private cloud adoption of particular interest and cloud expenditure tracking becomes a pre-requisite for fiscal justification. What’s driving this? “Cloud-flation” coupled with the fact that Gartner estimates 60% of organizations will encounter public cloud cost overruns that negatively impact their business.
There becomes a point at which it makes sense to consider switching cloud strategies, but to watch these tipping points carefully, you must have visibility into the right information, reports, and insights.
How Tangoe Supports Private & Public Expense Management Needs
Tangoe continues to invest in cloud to support the needs of our enterprise clients. When industry analysts estimated that as much as 80% of virtualized workloads run on VMware, the Tangoe One Private Cloud solution aligns with the demands of today’s diverse cloud environments.
Whether the client uses a public-only, private-only, hybrid, on-premises, or co-located approach, Tangoe can help. Tangoe’s solution is compatible with cloud servers located on-premises and/or in a third-party provider’s data center facility (colocation). It also works for those taking a private-only (versus hybrid) strategy to their cloud architecture.
Here’s how we streamline the administrative work of private cloud expense management:
- Direct integration with VMware vCenter® automates information capture and ensures the accuracy of data gathering
- Indirect costs are collected and processed including utility invoices, network and data center expenses, hardware costs, labor, and more — Tangoe then allocates every charge right down to every cluster and node
- Chargebacks are based on individual components of a private cloud instance, making it easy to hold departments and lines of business fiscally responsible for expenses according to the precise amount of cloud resources they use – alternatively costs can be allocated evenly across the business
Tangoe consistently enables a holistic view across all cloud cost elements – physical and virtual – to simplify the management of both private and public cloud spend. In delivering solutions that work with more of the tools your business uses every day, Tangoe aims to give you the peace of mind that comes from knowing you’re making sound investments, so you can redirect your focus and resources toward driving innovation and growth.
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