Optimising Spend & Cost Across Cloud Infrastructure
Potential cost reductions are one of the main drivers behind the global acceleration of cloud adoption.
Yet, if managed poorly, cloud costs can quickly sprawl out of control, rising above the level of in-house IT infrastructure.
Easy-access Guide to Cloud Cost Management
Cloud cost optimisation will remain an immediate priority for organisations running workflows in the public cloud through 2024, according to Gartner.
At researchHQ, our team has hand-selected the most valuable and relevant content for those looking to optimise spend and cost across their cloud environments.
Cloud Spend Trends:
If your primary interest is in identifying where to invest in cloud technology then Flexera’s State of Tech Spend report is an ideal place to start.
Alternatively, if you are short on time, here’s a useful blog breaking down the key cloud spend predictions for 2021 from InformationWeek.
Cloud Cost Management Strategies:
For those formulating a cost management strategy for the cloud, BMC has written an insightful blog breaking down the different cloud cost optimisation models.
Cloudcheckr’s cost optimisations best practices might be of interest to those who are unsure where to start in their optimisation journey.
Multi-Cloud Cost Complexity:
Multi-cloud deployment is becoming increasingly popular, however, this has only heightened the complexity of cost management.
Apptio’s blog breaks down how to overcome this complexity with a unified view of multi-cloud environments.
Table of Contents:
- Cost reductions are one of the main drivers of cloud adoption, yet, many organisations allow their cloud costs to sprawl to an unmanageable level.
- A lack of visibility over costs across cloud infrastructure makes it challenging for organisations to optimise cloud costs effectively.
- Overcoming common cloud cost management pitfalls demands the coordination of people, processes and technology.
- While there are certain best practices for cloud cost management, no one magic solution is available, and each organisation will require a unique strategy.
What is Cloud Cost Management?
Cloud cost management is about the efficient management of cloud expenditure. It involves understanding, identifying and managing the costs associated with an enterprise’s cloud technology.
There is no one right or easy way to optimise spend and cost across enterprise cloud infrastructure.
Cloud cost management tools only make up one component of a broader strategic transformation of people, processes and technology.
Enterprises are increasingly turning to the cloud to increase the flexibility, scalability, agility, and efficiency of their IT services and processes.
One of the main benefits of cloud adoption is the potential cost reductions. However, these rewards are not achieved by simply migrating to the cloud. In fact, the growing variety and complexity of cloud solutions risk significantly heightening cloud spend.
A Shift in Mindset
At its most basic, the challenge of cloud cost management is one of mindset. Enterprises are rushing to adopt the newest cloud technologies, yet there is a tendency to treat these technologies the same way as traditional on-premise IT infrastructure.
Reluctance to change can cause overprovisioning and waste.
Enterprises adopting cloud technology face a carrot and a stick. On the one hand, the cloud offers substantial cost savings if managed effectively.
On the other hand, if enterprises fail to take the time to put a cost management strategy in place, costs may sprawl out of control.
Optimising cloud costs means preventing heightened expenditure and maximising the resources that drew an enterprise to the cloud in the first place.
Understanding Public Cloud Costs
The majority of enterprises adopting cloud technologies utilise some form of public cloud service. These services operate using a ‘pay-as-you-go’ model. Charging based on usage should, in theory, minimise excess cloud spending. However, it also makes it more challenging to produce accurate cost estimates and, without the centralised oversight, costs often quickly spiral out of control.
To make matters more complicated, public cloud providers regularly update their features and services and offer price reductions. These ever-changing offerings have two primary effects. Firstly, the vast array of ever-growing offerings makes cloud resources and cost sprawl all the more tempting and easy to achieve. Secondly, it is difficult for enterprises to keep up with the pace of change and determine how it might affect their financials.
As mentioned above, the leading public cloud providers all offer a range of cost management tools. Organisations can manage these tools from a centralised dashboard displaying metrics such as billing reports and cloud usage data. However, these tools are of limited utility for organisations deploying a multi-cloud strategy.
Visibility & Multi-cloud Complexity
Managing costs over one public cloud is difficult enough; however, the adoption of multi-cloud deployment strategies substantially increases the complexity. Fragmentation between each service provider’s cost management tools makes it difficult to visualise costs across multiple different clouds.
This growing lack of visibility and decentralised control can easily lead to ‘cloud sprawl’ – the uncontrolled proliferation of cloud instances and services across different providers. Allowing cloud costs to build-up not only results in unexpectedly high cloud bills but also substantially reduces enterprises’ operational efficiency.
To successfully utilise the advantages of the cloud, enterprises must remember why they adopted it in the first place. If cloud spending is allowed to spiral out of control and operational efficiency drops, enterprises may end off worse than if they had remained with in-house IT infrastructure. A centralised cost management strategy is essential to optimising cost and spend across enterprise cloud infrastructure and meeting the initial promise of cloud offerings.
Common Sources of Cost & Wasted Spend
Tackling the challenge of cloud cost optimisation demands learning from the mistakes of those who have gone before you. Enterprises must understand how to manage necessary cloud costs and mitigate unnecessary costs and waste. Below are some common pitfalls to avoid:
Lack of Training
First and foremost among the sources of wasted cloud spend is a lack of training. Moving to the cloud requires a shift in mindset, and there is a risk of reluctance to change.
When enterprises adopt new cloud technologies, their IT professionals are often required to learn and adopt new tools and skills over a relatively short period. Without proper training, these professionals may fail to effectively deploy resources across the cloud, resulting in cloud sprawl and heightening cloud costs.
Cloud instances are servers running applications in cloud environments. Instances are an unavoidable cost for organisations adopting a public cloud model. However, when faced with the array of instances offered by public cloud providers, it is all-too-common for enterprises to select the incorrect instance size for their operations.
The wrong cloud instance size can result in both wasted spend and reduced workflows. If an enterprise is paying for a larger instance than required by the applications and processes it is running in the cloud, it might as well be burning money. Equally, attempting to run large or complex workflows using instances that are too small will significantly hinder operational efficiency.
Lack of Regular Cleanups
The pay-as-you-go model offered by public cloud service providers is only as useful as the organisation utilising it. Too few enterprises have adopted a regular cleanup policy, allowing unnecessary cloud expenditure to go unnoticed for prolonged periods.
Due to inherent visibility challenges in the cloud, enterprises often fail to notice instances operating in the background long after their original purpose is complete. These instances serve no purpose and, when several accumulate, can result in significantly increased cloud spend.
Improper Cloud Data Governance
One of the cloud’s primary benefits is the flexibility that allows easy sharing of data across an organisation. However, enterprises often fail to ensure that the data stored in the cloud is easily identifiable.
Failure to implement a managed system of tags and metadata will drastically reduce various teams’ operational efficiency within an organisation. The resulting friction in everyday processes leads to wasted time and resources and increased operational costs.
Lack of Automation
Managing cloud environments is becoming more complex with every passing year. Increasing cloud adoption means managing a growing number of users and the workloads they deploy across enterprise cloud infrastructure. The inability to manually keep up can easily result in wasted spend in the cloud spiralling out of control.
Without automation to help track, manage and analyse workflows within the cloud, enterprises struggle to detect and respond to wasted spend.
Cloud Cost Management Best Practices
Avoiding common mistakes is only the first step to overcoming the challenge in cloud cost management. To move beyond avoiding disaster and towards cost optimisation, enterprises must proactively implement certain practices and policies.
DevOps is far more than an empty buzzword. If DevOps implementation is important in standard IT operations, then it is essential in the cloud. DevOps culture will help to navigate the potential pitfalls outlined above, from resistance towards change to automation.
DevOps implementation will help enterprises form a unified visualisation of their cloud infrastructure by emphasising speed and automation.
Make the Most of Discounts
This one may seem obvious; however, too many organisations fail to take advantage of the discount options offered by public cloud service providers. For many enterprises, the range of different options available can be understandably overwhelming, particularly when deploying a multi-cloud strategy. Yet, it’s an opportunity that enterprises cannot pass up.
Enterprises should utilise the most appropriate deals offered by different providers whenever they are available. Unfortunately, knowing what deals are appropriate for an enterprise’s particular needs requires first achieving complete visibility into enterprise cloud infrastructure. Discounts will not revolutionise cloud cost management. However, they provide a valuable addition to a broader cost management strategy.
Ensure Clear Communication
The decentralised nature of cloud management often results in a siloed decision-making process. When forming a cloud cost management strategy, there must be a clear line of communications across the entire enterprise.
Communication, when practised correctly, allows centralised visibility and control over people and processes operating in the cloud while maintaining the decentralised flexibility for IT professionals to decide the best path. As soon as this balance falters, costs and waste will substantially increase.
Utilise a Cloud Centre of Excellence (CCoE)
This final point is somewhat related to the previous one; however, it warrants particular emphasis. A Cloud Centre of Excellence (CCoE) is a cross-functional team responsible for developing a cloud strategy and governance policies that can be leveraged across the enterprise.
When it comes to cost optimisation and management, sometimes it is best to simply leave it to the experts. Rather than risking siloed decision-making across the organisation, implementing a CCoE will unite thought on all cloud issues, including cost and spend.
Cost optimisation is one of the most significant challenges enterprises face when managing their cloud infrastructure today. High cloud bills resulting from unnecessary spend and waste in the cloud run directly counter to the benefits most organisations cite for adopting the cloud.
Outlined above are some pitfalls to avoid and best practices to implement, yet, these provide no more than a roadmap. Optimising cloud costs necessitates an enterprise-wide cost management strategy built around the specific requirements of that particular business.
Developing this strategy requires first gaining full observability over enterprise cloud infrastructure to understand the workflows occurring within it. From here, a strategy must be developed to manage and optimise cost and spend.