Controlling the Costs of Cloud

Recently, 451 Research asked IT decisionmakers to find out what were their main motivations for moving to the cloud. The information technology research and advisory company discovered that the desire to achieve cost savings played an important role. However, the company also discovered that 53 percent of the IT decisionmakers still found cost and budget control a key pain point after their cloud migration.

These findings are in line with the RightScale 2018 State of the Cloud Report, which states that 80 percent of companies surveyed cited managing cloud spend as one of their key challenges. The companies surveyed estimated that about 30 percent of their cloud expenditures are wasted, but RightScale estimates that the real percentage of wasted cloud spend is 5 percent higher than they estimate.

The issue of wasted cloud spend will only continue to increase as companies ramp up their spending on public cloud services. Gartner is forecasting that the worldwide public cloud services market will grow 21.4 percent in 2018 to total $186.4 billion, up from $153.5 billion in 2017.

To maximize the benefits of the cloud, companies must realize that cloud cost is now more important than ever and take steps to get their budgets under control. The following three tips summarize what leading cloud analysts and adoption experts see as the foundation of any cloud-centric company.

1. Centralized Management

“You won’t be able to manage your cloud costs without first identifying the origin of each expense you find on your bill at the end of the month. This is particularly important if you employ cloud services across your entire organization,” says Charles Phillips, the Chief Executive Officer of Infor, the world’s third largest provider of enterprise software applications.

In many companies, cloud adoption was spearheaded by individuals and small teams that deployed various cloud services without the oversight of the IT department. This guerilla-style method of cloud adoption inevitably leads to the development of shadow IT, where various cloud services are used without explicit organizational approval, making it nearly impossible for companies to know how much they are actually spending.

A much better alternative is to manage cloud services in a centralized manner and approach the issue of cloud adoption systematically. Gartner recommends companies to follow its cloud cost optimization framework, which consists of five main steps: plan, track, reduce, optimize, and mature.

2. Automated Solutions

“With cost complexity continuing to increase alongside growing usage, users, accounts, and instance types, [infrastructure and operations] professionals increasingly depend on tools to enable visibility, consistency, and scalability of management practices,” says Forrester analyst Lauren E. Nelson.

Automated solutions continuously aggregate important metrics, empowering their users to make faster, smarter decisions and making it easier to track usage and enforce company-wide policies. These days, tools that feature advanced analytics and machine learning capabilities are rapidly gaining popularity because they allow companies to reduce the burden that falls on their IT staff and benefit from intelligent cost optimization recommendations.

3. Vendor Lock-In

The very nature of cloud services should make it easy to switch between various vendors depending on the current needs, but the reality is more often than not very different. As a result, companies sometimes end up paying much higher prices because they misread the fine print when signing a contract.

Every company that wants to move its infrastructure to the cloud should do its homework and familiarize itself with public cloud pricing before committing to a single vendor. Some cloud vendors even make it difficult for their customers to get their data, which largely explains why Amazon, Microsoft, and Google, which offer pay-as-you-go pricing models and guarantee data portability, together control more than 60 percent of the public cloud market.

Cloud Cost Management with Vology

For most companies, a partnership with a managed IT, security, and cloud services provider such as Vology is the most effective strategy how to transition to the cloud and leverage its innumerable benefits. Vology can provide guidance to help you build, innovate and scale with the cloud, so you can focus on your core business as Vology’s certified experts design an optimal cloud adoption strategy and guide your implementation through to success, uncovering hidden costs along the way.

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