The Truth Behind Cloud Computing Costs

January 25, 2013

Cloud computing allows users ease and accessibility and lower costs, but Datamation analyzes, “What Are The Hidden Costs Of Cloud Computing?” Datamation pulls it information from Symantec’sAvoiding the Hidden Costs of Cloud 2013” survey, that shows cloud adoption is very high. Rogue deployments came from 77% of the survey-takers, meaning the clouds were not approved by corporate IT. Does anyone else here security breech problems?

Cloud storage may be lighter than air, but it is also costing money. That is not the scary point, however:

“Perhaps even more concerning is the fact that 43 percent of respondents admitted that they have lost data in the cloud. In Elliot’s view, there are a number of reasons for the cloud data loss. For one, the cloud data provider could have lost the data in a failure of some sort. What is more likely, though, is that some form of user human error led to the data loss.

‘The user could have accidentally misplaced the data and literally just could not find it,’ [Dave Elliott, senior manager, Global Cloud Marketing at Symantec] said.”

Cloud users are also not fully using all of the storage they pay for and they also do not have data duplication in place. What can we learn from this? Install security policies for the cloud, reevaluate the costs, and make sure everything is consistent! In truth, does anyone even notice the costs compared to responsibilities being shuffled around and cutting staff?

Whitney Grace, January 25, 2013

Sponsored by ArnoldIT.com, developer of Beyond Search

Amazon Cloud Cost Comparison Revealed

December 28, 2012

Deep Value, purveyor of respected stock-trading algorithms, is dissatisfied with its Amazon Cloud Services investment. The company’s blog declares, “EC2 is 380% More Expensive than Internal Cluster.” Deep Value was using Amazon’s EC2 cluster with Hadoop to run simulations, but the bill kept increasing month by month. Their managing director of technology, Paul Haefele, says he performed some “back of the envelope” calculations that suggested there was a better way. He writes:

“Tiger Direct will sell you a Seagate 3 terabyte drive for $154. For the same storage on S3 for 2 years, I would pay (1,000 * 0.125 + 2,000 * 0.11) * 12 mths * 2 yrs1 = $8,232 at the standard rates. Buying our own drive was 2% of the cost of using EC2, so this certainly seemed worth investigating.”

Haefele’s team deployed a Hadoop cluster with the data-center company Telx, whose rates they found reasonable. They invested in 20 Linux servers running the open-source CentOS and a couple of switches. They factored in hosting costs, then ran some simulations. See the article for the technical details; Haefele summarizes his conclusions:

“If we compared just on what we are getting in terms of compute and storage, our cluster is costing us $12,700 per month versus $48,564 (33,599+15,965) for EC2.

“EC2 is thus costing us over 3.8 time more per month.

“Whatever way we slice this, either by storage cost or by compute, it seems clear that using your own data center rather than EC2 makes sense for us. For one-off peaks EC2 makes sense, but given the ongoing nature of our simulated analysis, moving to our own datacenter is a very clear winner.”

So, sometimes DIY is worth the effort, as this extreme example shows. Thanks to Deep Value for sharing this important information. I wonder—how many businesses will take advantage of it?

Cynthia Murrell, December 28, 2012

Sponsored by ArnoldIT.com, developer of Augmentext

Quote to Note: Real Consultant Illuminates HP Autonomy

November 22, 2012

Heck, let’s put the 451 Group quote in granite.

I am getting ready to head from England, the land my ancestors fled in 1596, to return to Harrod’s Creek, Kentucky, the culinary center for down home Thanksgiving cooking. (We do squirrel stew. How about you? Now I am sitting in the Dublin airport relishing comments allegedly made by a “real” expert, a 451 Group consultant no less. My source is “HP-Autonomy Fraud Allegations Fallout: The Winners and Losers.” Please, read the original article. It is priceless.

Here is what has me seeing those cartoon stars and exclamation points popular in the funny papers:

The fraud scandal “probably will” affect Autonomy’s fortunes “and I think that’s a shame…Autonomy always had very good technology, but they weren’t able to leverage it very effectively. In HP’s hands, it could be leveraged much better. On the other hand, Autonomy was “acting as a holding company to a large extent, anyway,” following many acquisitions. Only its core IDOL product is quite closely linked to the Autonomy name, “There are some good pieces there and still some strong brands.” (Attributed to a real consultant doing business as Alan Pelz-Sharp.)

Yowza. Consider these observations I jotted down.

  1. The word “probably”. Better safe than confident in one’s facts.
  2. I absolutely love “shame”. Yep, investment bankers are really sensitive to shame, particularly a year after a deal closes and the fees have been paid.
  3. The assertion “they [Autonomy] were not able to leverage it.” Stunning. I thought Autonomy had been in business for 13 or 14 years and had generated north of $700 million, bought a number of companies, and got its logo on a football team and an F1 car. To my albeit limited knowledge, no other search vendor has come close to Autonomy’s top line revenue. $700 million is a healthy figure and somewhere along the line taxes had to be paid, financial reviews conducted, and invoices sent.
  4. Autonomy was a holding company. Okay, this is not the analogy I would choose but let’s assume Autonomy was a holding company. Perhaps the 451 Group’s expert knows line of business revenues and pre tax profits by each of Autonomy’s operating units. Where are the breakdowns?
  5. Only IDOL is linked to Autonomy. My obviously misguided notion was that Autonomy bought a company and then slapped the IDOL brand on the company’s products and services. Then integration tagged along but Autonomy management worked hard to make IDOL the brand for many of its services as Autonomy managed the heck out of staff costs and embarked on upselling. Guess I was ill informed.
  6. “There are some good pieces” begs some detail. Perhaps a good piece is Virage or the virtual reality Aurasma technology which I covered in one of my Information Today columns?
  7. Again that categorical “only” troubles me but I will soldier on.
  8. Yes, I presume fraud will have some impact.
  9. I find the Latinate predicates stimulating as well.

Some color is in order.

451 Group (the “number” references either a science fiction novel or the flash point of paper, which is going out of fashion among some digerati) is a consulting and professional services firm with expertise in “cloudscape,” “multitenant data centers, and a half dozen other specialties. Disclaimer. I used to work for Booz, Allen & Hamilton and now I write “reports” for IDC, another outfit in the same line of work at 451. This means that one has to determine which consulting firm is on the beam. I will let the reader decide, but my bet is on folks who have done time at one of the pantheon firms, not the firms lower in the rental brains’ pecking order.

I have commented on Autonomy is a number of published reports. These range from the now hoary Enterprise Search Report which first appeared in 2003 or 2004 to my 2011 study “The New Landscape of Enterprise Search.” Free download here. I had to sit through various briefings, do some independent verification and validation work, and interact with some of the folks who had a little first hand experience with things Autonomy. I have to check my files, but I think I did a tiny job for Autonomy, but it is tough for me to remember after 40 years of blundering around in the online, search, and content processing sectors. Unlike the 451 Group’s experts, I am not qualified in the cloudscape thing or the multi whozit. I am so so in search and okay in a couple of other disciplines. I eat squirrels too.

My official position is that folks who license enterprise search systems like Autonomy or Endeca usually wind up with some interesting challenges and some hefty bills. When one taps Autonomy-like system or even a free, open source search solution, the likelihood of financial excitement six months into a search project is quite high. When signing on for an enterprise search system, arrogance and ignorance on the part of the customer can equal the spirit of a gaggle of Googlers. One  difference: The Googlers are usually okay with resources, money, code and math. Procurement teams, in my experience, assume their intellectual firepower would decimate other mortals. Wrong. But optimism can be a positive attribute. Just not in big time search solutions.

Enter the marketers, lawyers, and MBAs.

Now a covey of these professionals can draw fascinating conclusions about enterprise search. My problem with the write up and the quote is that the facts of the matter are stark. HP paid billions for a search vendor. HP is in a bit of a financial muddle. HP wants to blame everyone except itself. The losers omitted from the write up are the ones which matter: HP employees, HP management, and the HP Board of Directors.

Maybe the accounting was erroneous. Maybe the auditors stayed up late and drifted through the various audits. Maybe the lawyers, MBAs, and auditors were more focused on their billable hours and commissions. Maybe Autonomy explained how search and content processing deals worked and assumed that the HP team “understood” the upsides and downsides of search.

Somewhere along the line “real” consultants and the legions of people grabbing a piece of the billion dollar deal may be revealing their own intellectual shortcomings. Search is tough. The price HP paid for Autonomy is what it is. A year after buying a property, HP wants its money back. That’s the charming world of business today.

With “real” consultants and big companies looking for a silver bullet to complete their imaginary magic wands, bad deals are the rule. What makes Autonomy interesting is the amount paid by a company which is fraught with management, financial, and technical challenges. I used to keep a list of missteps. But after fumbling the Alta Vista search system opportunity, I lost interest. HP and the “real” consultants want to explain away a mistake without pointing out who triggered the problem. Arrogance, superficial analysis, and lack of search expertise caught fire when big money was in play. Combustible mixture? Yes, indeed.

Stephen E Arnold, November 22, 2012

Science Information Breaking Free From Traditional Publishing

October 21, 2012

A couple of Cambridge entrepreneurs are putting forth another effort to break science information free from traditional publishing’s grip. I recently read the article “A Plan to Open Up Science Journals” on The Boston Globe, which informs us of the project that is attempting to bring the iTunes single-purchase sales approach to often costly scientific journal research. The project is dubbed ReadCube Access and would break the trend of purchasing yearlong subscriptions, called site licenses, by instead offering individual articles for sale.

The article tells us more about the implementation of the product:

“So far, the two entrepreneurs, who are founders of a Cambridge company called Labtiva, have sold the ReadCube Access idea to the industry giant Nature Publishing Group and to the University of Utah’s library system, which started implementing it this fall.

Researchers at the University of Utah can get access to individual journal articles in one of Nature’s 80 or so subscription-based publications, many of which Utah cannot afford to buy.”

This effort to change the way scientific research is published could help libraries lower costs over time. Researchers would also benefit from this method, because ultimately their tedious searchers would result in the source document appearing, not a subscription or purchase form.

Andrea Hayden, October 21, 2012

Sponsored by ArnoldIT.com, developer of Augmentext

The Cost Angle in the Social Media Monitoring Craze

March 20, 2012

Search Engine Journal offers good advice in the very detailed article “Think Before You Pay Too Much for Social Media Monitoring.” Writer Jen Carroll explains:

 

“Paid tools run the gamut, from blessedly affordable (for solopreneurs and small businesses) to outrageously expensive (only the big guys can even hope to afford them)

 

“Just like Web analytics tools, social media reporting systems can provide a wealth of data. But, is all that data necessary? How much of it is even useful? For most small and even medium-sized organizations, I would argue that only a small slice of what most reporting tools spit out is actionable.”

 

Carroll follows up with specific advice under several headings: Track Only the Social Media Metrics That Matter; Try Free Social Media Monitoring Options First; and Carefully Evaluate Paid Social Media Monitoring Tools Before Purchase.

 

Sample advice: figure out what you need first, so you don’t pay for what you won’t use. Also this tip: pay attention to ease of use; you’ll use the tools more often if you actually like using them.

 

See the article for more words of wisdom on getting the best value out of social media monitoring.

 

Stephen E. Arnold, March 20, 2012

 

Sponsored by Pandia.com

PLM Eases Cost of Change Complexity

January 6, 2012

No one likes change and for manufacturers it can be costly. So how do companies manage and budget for change processes? The article “PLM, ECO and Cost of Change” analyzes that question and how PLM systems support them.

For PLM implementation, it is important to know “how you are able to automate cost of change calculation and embed it in the overall change process.” Changes are classified into four categories which are cost reduction, product maturity, product development and other and the change cost calculation will be different for each category.

“If you estimating change that marked to save cost or time, you absolutely need to calculate the cost. However, if you making a change that related to product maturity, you probably can skip some cost of change calculation. Taking right assumption can significantly improve the speed of change processes, which is an essential part of every manufacturing organization.”

Change cost analysis is complicated. PLM systems certainly help, but companies like Inforbix simplify the process. Inforbix focuses on product data and they find and infer relationships between disparate sources of structured and unstructured product data. So do not be afraid of change. Sometimes change is good.

Jennifer Wensink, January 6, 2012

SharePoint and Its Sometimes Interesting Costs

November 3, 2011

SharePoint is touted as the ultimate solution to content management and collaboration for enterprises. Microsoft, however, never discusses the costs associated with their software, except for how it’s cost effective and overtime will save your business money. But is that true? Redmondmag.com posted an enlightening article about the hidden costs involved in a SharePoint project, “Study: SharePoint Costs High Due to Inadequate Skills.”

A study conducted by the Azaleos Corp. discovered that the average cost to run SharePoint per user is $46/month. Using Microsoft Exchange proved to be cheaper at $15-15/month per user. SharePoint users also cited downtime as the most common problem.

“The downtime mostly stemmed from hardware errors or mistakes made by IT team members. Those problems caused average monthly management costs for SharePoint to double to around $90 per user per month. Almost half (43 percent) of study respondents pointed to “a lack of administrator skills, training, and knowledge as an inhibitor to efficiently leveraging SharePoint.”

SharePoint is still a young piece of software with a manifest destiny for its future. Its problems are many, but there are a lot of third party solutions to resolve them. At the end of the article, Azaleos Corp. advertises it’s AzaleosX app to help increase uptime.

We believe that you may want to take a close look at the cost effective search and content processing solution from SurfRay. Contain costs and improve user satisfaction with one snap in for SharePoint.

Whitney Grace, November 3, 2011

SurfRay

Google Wants More Cash – Enter Google Analytics Premium

October 13, 2011

The article, Google Analytics Premium Pricing Revealed:  150K a Year!, on Center Networks exposes Google’s new tactic for generating revenue.  The article explains all the services companies would gain by subscribing to the service:
So basically for a fee, Google will provide a stronger server to run your custom reports, a dedicated account manager and a 24/7 support and service level agreement (SLA). The one thing Google didn’t note in their announcement post was the cost for the premium analytics offering.  I have received tips from several sources noting that the price for the premium analytics service is A WHOPPING $150,000/year.
The article also includes a comparison of similar services with Adobe’s Omniture SiteCatalyst which runs in the 100Ks.  What isn’t discussed is that similar services can be found for much less – try for nothing!  The website AWStats is a “free powerful and featureful tool that generates advanced web, streaming, ftp or mail server statistics, graphically.”  It is definitely worth looking into as a viable option.
While we would never doubt the benefits of Google Analytics Premium we do question their true intentions with the steep fees.  True, only the largest companies need Google Analytics Premium, but now it also seems that Google needs its largest companies just as much.
 
Catherine Lamsfuss   October 13, 2011

India Based Call Centers: The Worker Perspective

July 16, 2011

ReadWrite Enterprise asks, “What’s It Like to Work in an Indian Call Center?” For an answer, writer Klint Finley turns to a Mother Jones article by an American writer, Andrew Marantz, who sampled Indian Call Center training.

With regard to overseas call centers, ReadWrite generally focuses on is whether businesses should invest them now or wait until working conditions and customer service quality improve. That question remains unanswered here, but this piece does call attention to the workers’ perspective.

Finley summarizes:

“Much of the article revolves around the cultural impact that the business process outsourcing industry has brought to India, both good (more economic opportunities for women) and bad (the potential stifling of Indian culture as call center workers attempt to conceal their identities). Here are a few interesting points:

Other key points we noted:

  • There are almost as many women as men working in the call centers.
  • Many of these workers are college educated, but are doing very basic work.
  • Some workers are encouraged to eat American fast food and listen to American music, even on the weekends.”

Treatment of Indian workers by their employers eager to westernize them is a tangled thicket.

How does this relate to search? Three points of contact.

First, search vendors talk about improving customer service. What seems to be more accurate is reducing the costs of support for the company offering help to its customers.

Second, it is not clear in my mind that brute force indexing or even more sophisticated systems do much to address the disconnect between what a customer needs and what is available to answer the question. If the answer is not in the processed content, who is kidding whom?

Third, the notion of improving a customer interface sounds great in a meeting. But the actual implementation is usually more about preventing the customer from contacting the company saying it is “customer facing” and “committed to excellence in customer support.”

Enterprise search vendors know how to address these issues. Right?

Cynthia Murrell July 16, 2011

What Does OmniFind 9 Cost?

June 20, 2011

Good question. We fielded this one a week or so ago. The answer was surprisingly difficult to find. We did get the info, and we wanted to pass along an item form 2010 which we wanted to document.

Cnet Japan reported “IBM Japan, Ltd., Announcing Search Software Which Mounts Both Functions ‘Reproducibility’ and ‘Comprehensiveness.’” In an article which describes the advances in this version of OmniFind, what caught our attention was the section on price. As translated via Google Translator:

“IBM OmniFind V9.1 fee is large for ‘IBM OmniFind Enterprise Edition V9.1’ is 716 million yen (excluding tax, 100PVU per case) per division that can start small ‘IBM OmniFind Enterprise Starter Edition V9.1’ is 40,000,491 yen (excluding tax, 100PVU per case, up to 200PVU).”

40 million yen was almost $500,000. We liked the entire post.

Cynthia Murrell, June 20, 2011

Sponsored by ArnoldIT.com, the resource for enterprise search information and current news about data fusion

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