Chief Technology Officer at FIEM®a leading provider of backup, restore and data management solutions that provide state-of-the-art data protection.
Even though companies are skillfully searching for ways to use the cloud to increase value for their business, many of them still struggle to manage what they spend on the cloud. That’s amazing. One of the selling points of cloud in the 2000s and early 2000s was the cost advantages it would bring: If you embrace the cloud, you can shut down expensive data centers and run your business on cost-effective SaaS software. These factors still apply, but report after report shows that organizations continue to experience sticker shock when they get their monthly cloud bills.
What is happening? One problem is that companies new to the cloud lack experience with cloud payment models. They realize that payments are shifting from CapEx to the OpEx structure, where they pay on a monthly basis and no longer have to invest in huge hardware expenses. But until they receive their first invoice, they will have no idea how to track, view, and manage costs on an ongoing basis.
In the cloud, customers pay for the number of services the cloud provider performs for them. They can buy bundles that include certain items, some at a discount. But it’s basically a function of how many instances they’ve run, how much bandwidth they’re using and how much information they’ve uploaded or downloaded. Customers do not pay for these functions within their own data centers. Until they get their first bills, they are unaware of how much it costs.
then, shock. After they pay their first few bills, they get used to the cost structure. But companies are still struggling to create effective cloud cost management software that will support them over a long period of time.
How can companies avoid runaway cloud expenses?
Assess your cloud requirements.
First, ask yourself: How much cloud do I really need? Many management teams step in because they feel they have to keep up with the competition and show technical staff that they are committed to modernizing the IT capabilities of their organizations. This is commendable. But in some cases, it is also reckless and expensive.
Before embarking on a cloud project, it is best to be realistic. Cloud costs are inherently volatile and difficult to manage, so don’t get far ahead of your needs. Try to avoid lifting and shifting entire work functions that require heavy use on a daily basis. Multicloud apps present opportunities to take advantage of the strengths of different platforms, but they can also be difficult to manage. Don’t provide each department with heaps of cloud instances before deciding how their uses will contribute to your overall cloud strategy.
Focus on the strategic elements.
To optimize your cloud investments, make sure your plan addresses the right use cases. These should include mission-critical projects where the cloud can make a difference — projects focused on resilience, geographic footprint expansion and compliance, to name a few.
Instead of lifting and shifting huge workloads, build cloud platforms for new “green” workloads that don’t require extensive rebuilding. Design specific apps and services for the cloud to truly take advantage of what you offer. If you’re not designing specifically for the cloud, making too high a commitment can be a financially detrimental move.
Nearly two decades after cloud computing has become a household word, companies are still struggling to avoid overpaying for services. It’s a challenge. But there are some strategies to use. Creating and maintaining a smart, cost-effective plan over time can help business leaders focus on generating real value from their cloud applications.