CIOs turn to cloud-based analytics to manage IT asset costs

Clint Boulton

HP’s Loura agrees, noting that corporate shifts to cloud consumption requires a "different approach and set of tools to manage financial decision-making." Finances in the cloud model are calculated as operational expenditures rather than capital expenditures.

AOL taps Apptio to manage decentralized IT

AOL began using Apptio software three years ago in the midst of a major business turnaround. The Verizon-owned media company uses the software to help calculate IT service costs for what had become a highly decentralized organization, says CIO James LaPlaine. Prior to using Apptio, business units complained that they didn't understand the value of IT services they consumed. "It wasn't very transparent, but there was clearly a charge from IT to somebody running MapQuest," he says. "It was kind of a black box."

LaPlaine says he started off with rudimentary calculations, using Apptio to figure out total IT costs divided by total IT assets. This revealed data duplications in the general ledger, missing lease costs and other bad data. "We spent a ton of time cleaning up data ... now we have a very rich model," LaPlaine says. He counts 25 IT services in AOL's service catalog, which produce 70 invoices every month to run and support IT services, including public cloud software from Amazon Web Services and Salesforce.com, as well as kilowatt power costs its IT systems generate. LaPlaine, who sends the corporate finance department a file with the costs every month, says he's also using a new planning tool from Apptio to build his IT budget for 2016.

Apptio helps LaPlaine make the case for senior IT management being viewed as a strategic differentiator. Using Apptio, LaPlaine strengthened his case to the CFO that closing a data center with 26,000 IT assets would reduce the company’s carbon footprint by 35 percent; it worked and AOL shuttered the data center, decommissioning 14,000 servers and moving some workloads to AWS. “When we talk about the strategy of the company it’s not from defensive position of “Why is your cost structure X?” LaPlaine says. “It’s more about, if we enable the following, we can accelerate this business plan into new markets, territories or lines of business.”

More than 250 companies, including one-third of the Fortune 500 are using Apptio's software, Gupta says. Customers include First American, Goldman Sachs, , Freddie Mac, and Boeing. Apptio, which has raised $136 million of funding to date, is hosting its customer conference, called Technology Business Management, next week in Chicago.

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