Follow IT's Money: A Survey of IT Financial Management Vendors

With all the talk of Cloud Computing and the transformation of IT, conversations mostly center on technology. But core to real IT transformation is the financial transformation of IT as well.

I've recently written about IT's need for financial metrics and financial transparency (a recent blog of mine has a great set of resource pointers on this very topic) but haven't done a deep dive into the companies - and products - that enable this change. In the course of researching I've found that the market is getting increasingly crowded with players... and indicator to me that this segment is beginning to become more important to IT leaders.

At its core, IT finances are based on capturing and monitoring fixed vs. variable costs, use and utilization of assets, and then blending-in operational costs. Other more sophisticated IT finance tools then allocate those costs to projects and/or organizations across the enterprise, and some even integrate that data into other finance applications (See this Blog by Paulo Prazeres on the topic). Still other tools extend out into the public cloud, monitoring usage and cost - even making recommendations regarding other pricing options and even other cloud providers.

Overall, in my opinion, these tools should be used with one goal in mind: Running IT more like a business. To do so, you need to know your sources of fixed and variable costs, costs of alternative sourcing, per-unit service costs, and who costs are allocated to. (Note: knowing costs is a requirement, actually charging-back is not).  So, when choosing tools, consider what you might need for your basic here-and-now requirements, also consider where you want to be in a few years, and what vendors are likely to offer those features as well.

Disclaimer - I may have unintentionally omitted some vendors... if so, please let me know so I can add them in. ~ KO

Subscription Billing
This class of players provide approaches to manage online subscription services, be they recurring SaaS or perhaps even other cloud-based infrastructure services. Many have flexible policy engines to support a variety of recurring revenue models.  This group of vendors isn't necessarily core to providing IT financial transparency, but may provide important services for specific IT business models.

Aria Systems - (San Francisco, CA) SaaS based service providing subscription billing and recurring revenue management; flexible billing/metering on any metric within the data center. Multiple connectors into many types of accounting systems

Monexa -  (Vancouver, BC) A very comprehensive suite of tools for billing automation for the entire subscription lifecycle of the business from initial offer to revenue to renewals.

Zuora - (Redwood City, CA) With an impressive set of customers, they provide enterprise-class, cloud-based tools to launch and scale any subscription service, quickly and affordably.

IT Accounting, Charge-back, Show-back
This next set of companies is by far the broadest, with all vendors providing at least basic products for monitoring, allocating and (most of the time) charging-back variable IT costs. This is all a foundation for providing basic IT cost transparency.

Cloudability - (Portland, OR) The platform aggregates our customers’ cloud costs into accessible and comprehensive reports to help manage spending, reduce waste, and identify opportunities for cost savings.

CloudRows - (Israel) Provides cost control for Amazon Web Services (AWS) accounts; enables you to be sure you are operating within your IT budget, and notifies you before a budget exception is about to occur. Works by constantly monitoring AWS activity logs in the background, and producing cost analytic reports for budget tracking.

Cloudyn - (Israel) Yields a deep view of application use of cloud resources, and actionable solutions for cost optimization; continually collects utilization, consumption, availability, capacity, and cost metrics for monitored cloud resources i.e. Compute (e.g, AWS EC2), Database (e.g, AWS RDS) etc.

Costnomics - (Fremont, CA)  SaaS based tool providing IT Financial Management; Service Cost Management; IT Investment Management; IT Charge Management. The resulting value is to provide Cost Transparency, optimized IT Spend, and better business alignment.

Newvem - (Israel) Newvem tracks and analyzes cloud resources usage, especially as they sprawl, identifying sub-optimal and vulnerable use of cloud resources with regards to security, availability, utilization, cost effectiveness and more. Then, recommends what needs to be done. Newvem does this by combining powerful data analytics of cloud usage data and curating crowd-sourcing knowledge and expertise from active cloud users, the community and experts for each specific issue that arises.

Nicus Software - (Salem, VA) Provides enterprise-wide IT financial management application used for IT chargeback, cost visibility, budgeting and forecasting. Suite is a comprehensive set of chargeback functions to support many different chargeback methodologies including resource-based, subscription-based, fixed cost, distributions, allocations, pass-thru and adjustments.

Pace Applied Technology - (Warrenton, VA) Offers accounting for IT resources, user chargeback, financial analysis and reporting. Provides the means to identify resource use, determine the cost of utilization, and charge the appropriate system users and/or business activities.

uptimeCloud -  (Toronto, ON) a cloud cost monitoring service that will help you measure, monitor and manage the cost of all your cloud based infrastructure in AWS (Amazon Web Services). Provides Cloud cost monitoring, Cloud cost forecasting, and Cloud cost showback. From Uptime Software.

IT Finance and Technology Business Management
I've chosen to break this out from the section above due to the more comprehensive features that appear to be provided by the vendors. These products play a more strategic role to manage and forecast costs, evaluate overall value, and assist in IT/business decision-making.

Apptio - (Bellevue, WA) Enables IT leaders to manage the cost, quality and value of IT Services by providing deep visibility into the total cost of IT services, communicating the value of IT to the business through an interactive "Bill of IT"; strategically aligns the planning, budgeting and forecasting processes

BMC - (Houston, TX)  Business Service Management Delivers comprehensive transparency into resources and associated costs required to provide IT services to the business; process for capturing demand, as well as a means by which it can be prioritized and managed based on business goals and objectives;  Enables IT to budget and forecast expenses from the perspective of IT resources, activities, and their associated costs.

Claritia - (Fort Worth, TX) Provides solutions aimed at delivering complete transparency into the total cost of IT ownership and delivery so executives can easily optimize and forecast their budgets. Products for IT cost transparency, IT financial management and IT cost optimization.

CloudCruiser - (Roseville, CA) Provides cost visibility and optimization across heterogeneous internal/external cloud environments. Offers a comprehensive suite of applications to map and measure resource usage independent of computing environment, allocating costs based on IT-defined criteria, and providing flexible and in-depth reporting of that usage.

Comsci - (Iselin, NJ) Establishes product and unit costing metrics for benchmarking and/or chargeback; quantifies and presents the TCO for all IT applications and solution; provides actionable metrics and analytics for cost reduction opportunities and comparison to alternative solutions

Cube Billing (Dallas, TX)- a cloud-based application with two service offerings: An Internal Billing/Chargeback System and an External Billing System. ability to easily understand cost information via a cost allocation and chargeback application. We help make financial data transparent across sales, delivery, account teams, and external clients.

Other Resources & References

• IT Financial Management Association
• Gartner's IT Financial, Procurement & Asset Management Summit 
• IT Financial Management tools from major vendors
• HP IT Financial Management
• VMware IT Finance Manager (Formerly Digital Fuel)
• BMC Financial Planning and Budgeting

Cloud: What's a Service? Who Are SPs?

My perspective of Cloud Computing has been rocked a bit.

Simplistically, I assumed I knew what IaaS, PaaS and SaaS meant, and I thought I knew who the logical public providers of these services would be.

However, there have been a number of interesting new services - and providers - that show signs of breaking the stereotypes.

BTW, when I speak of services, I'm specifically meaning Component Services. Think of that as a mapping service;  a brokering service; a credit card clearing service; a datamart.

And in an increasing number of cases, I am seeing these services  being sourced from providers that are not the traditional hosting or SaaS providers you might expect. This leads me to believe that there will be a number of business models which the cloud makes possible that we've not yet considered. And these models will come from startups and established companies alike.

The first set of services that got me thinking comes from PayPal, and is X.commerce. Somewhat analogously to Amazon, eBay has observed that its mainstay businesses of auctioning and payments could be extended by making infrastructure and component services available separately to online merchants. X.commerce is their attempt to make service products such as credit card payment processing, cataloging, auctioning etc. available as a la carte APIs outside of the eBay/PayPal site.  We all think of eBay as an online "SaaS" platform, but they now need to be re-thought of as a cloud services provider as well.

Wall Street Exchange, or Cloud Service Provider? I'm referring to NYSE Capital Markets Community Platform (CMCP) that I blogged about back in June.  In an attempt to capture more customers such as hedge funds, NYSE took quite a step to launch its own special-purpose cloud-computing (IaaS) platform, right across the Hudson from Wall Street. Not only does is it intended to host high frequency trading apps, but it also houses a Big Data repository of historic exchange trading ticks, against-which trading algorithms can test their effectiveness.  Much like the example above, we have a business that turns itself inside-out to expose internal services (and data) creating an entirely new business model.

Next, I tripped over ifttt (If This, Then That). On the surface, this looks like a simple hosted scripting site.  Anybody can set up a simple decision/action...  i.e. IF I'm mentioned on Twitter, THEN text me; IF I'm tagged on Facebook, THEN post a message... and so on.  Ifttt goes further by allowing others to create combined "recipes" that you can use.  In some sense, this is an ultra-simple service mash-up that's hosted on the web for you.  And, if you adhere to the theory that very simple actions can be combined and nested to form more complex actions, there might be some pretty sophisticated personal automation features that Ifttt will enable in the future.  Ifttt is a pure online decision service.  Not sure what I'd call them, but this is a frame-breaker.

It's a Store! It's a Streaming Service Provider! Yes, even Walmart Entertainment is arguably now in the cloud Services game, with Disc-to-Digital which (using Vudu, a video streaming acquisition) allows users to stream videos from the web, assuming they've already purchased a DVD (read: Digital Rights) in the store.  Like Barnes and Noble, Amazon, iTunes, Netflix and others, the rush toward becoming a digital media distributor is blurring the lines between brick-and-mortar vendors and digital streaming Service Providers.

I'll be keeping my eyes out for other examples of new forms of IP disguised as cloud services. I'm sure I'll keep being surprised.