Strategy: Calculating APM Costs
APM: How to Calculate Your Costs
Application performance management (APM) software and hardware are essential for organizations that need to monitor and manage critical applications. APM products can help IT maintain high levels of uptime for end users and customers, meet service-level agreements (SLAs), and identify and resolve problems quickly.
But while APM tools are useful, they are also very expensive. Depending on the types of applications being monitored, the complexity of the application environment and the monitoring approaches adopted, an APM deployment can easily cost hundreds of thousands of dollars. Even in the best of economic circumstances (anyone remember those?), IT must get in front of the CFO to outline how much an APM product set will cost and justify how the project will benefit the company.
How much does it cost to deploy APM products? We’ll find out in this report, using a total cost of ownership (TCO) model based on a fictional company called Acme Enterprises. We’ll examine all the costs involved in an APM deployment, including predeployment work such as analyzing the gap between the organization’s needs and existing products, and creating application dependency maps of critical services. We’ll also explore the costs of integration, software and hardware, licenses, and ongoing operations and maintenance. The report includes a reusable spreadsheet that organizations can use to plug in their own numbers. Our model is designed to help organizations ask the right questions of vendors and build an accurate cost model prior to deployment. (S2161210)
Table of Contents
3 Author’s Bio
4 Executive Summary
5 ‘Acme’ Bites the APM Bullet
5 Figure 1: Motivating Factors
6 Figure 2: Outage Issues
7 Figure 3: APM Advocates
8 TCO Components: Planning and Design Come First
9 Figure 4: APM Budget Allocation
10 Software and Maintenance
11 Deployment and Integration
11 Figure 5: Use of APM Tools to Monitor SaaS or Public Cloud Apps
12 User Training
12 Figure 6: Satisfaction With APM Dashboards and Reports
13 Acme’s APM Post Mortem
14 Figure 7: Performance of Monitoring Tools
15 Related Reports
About the Author
Michael Biddick is CEO of Fusion PPT and an InformationWeek Analytics contributor. He has worked with hundreds of government and telecommunications service providers in the development of operational management solutions. Most recently he has supported the Department of Homeland Security and the U.S. Department of Defense in the deployment of ITIL-based processes that are utilized to make their organizations more transparent and cost effective. Certified in several ITIL life cycle service areas, Michael is also able to leverage over a decade of operational tool design and implementation experience with service desks, network management systems and consolidated management portals in making enterprise architecture decisions.
Prior to joining Fusion PPT, Michael spent 10 years with a boutique consulting firm and Booz Allen Hamilton, developing enterprise management solutions for a wide variety of both government and commercial clients. He previously served on the academic staff of the University of Wisconsin Law School as the director of information technology.
Michael earned a Master of Science from Johns Hopkins University and a dual bachelor's degree in political science and history from the University of Wisconsin-Madison. As a contributing technology editor to InformationWeek and Network Computing, he has authored more than 50 articles, including reports on cloud computing, government IT strategies, SaaS and IT process improvement.
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