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emystifying the Economics of Virtualization and Cloud Computing Posted by Michael Vizard Mar 15, 2011 11:51:15 AM Make the Financial Case for Virtualization and Cloud Computing With the advent of virtualization and cloud computing, figuring out the actual cost of enterprise computing has never been more important or complicated. Now that every application to one degree or another is eventually going to wind up sharing IT infrastructure with some other set of applications, ascribing costs to each application gets significantly more difficult. In the past, when every application pretty much had its own servers, the costs were clear, except for mainframe and minicomputer environments that were designed from the ground up to run a symmetric multiprocessing environment that supported multiple applications. But now that virtualization and cloud computing are pushing the concept of shared IT infrastructure across the entire spectrum of IT, application owners want to know what their true costs for running these environments actually will be. In addition, the chief financial officer - along with the rest of the board of directors - is demanding a more line-by-line accounting of the allocation of IT resources. Conceptually, most IT leaders should welcome this increased level of scrutiny. It gives them a chance to show how efficient they can be, which represents a significant change of pace after decades of meetings with senior managers that only really wanted to know what the availability of IT services was without much regard to the actual budget. The challenge facing many IT organizations today, says Chris Pick, chief marketing officer for Apptio, a provider of IT financial management tools that are available as a service, is they just don't have the tools needed to delve into all the financial elements of the overall IT equation. For example, a new survey of 100 CIOs in the U.S. that was conducted by the market research firm Worldwide Executive Council on behal

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