The slow and steady rise of cloud-based solutions has become one of the greatest innovations of the modern, digital era. No more are businesses required to download full-length software, host hefty applications, or prepare computerized databases on their own systems. Instead, they can remotely connect to the extensive cloud network and access the latest programs, services, resources, and platforms in an efficient, secure, and scalable manner.
However, despite such substantial usage, less than 10% of organizations consider themselves to be adequately equipped to address this sudden surge of cloud proliferation. This is because most businesses continue to be overwhelmed by the complex challenges of data privacy, server reliability, vendor lock-in, prospective interoperability, and potential downtime on a regular basis.
In addition, the one factor which proves to be a major hindrance in the adoption and integration of cloud services is – cloud cost management.
What is cloud cost management?
Cloud cost management, also referred to as cloud cost optimization is essentially a technique of planning that aims to recognize, understand, and manage all cloud-related expenses in a cost-effective and sustainable way.
It primarily involves delineating, grading and organizing cloud-based costs in a systematic manner, so that unnecessary charges, if any, can be eliminated. Cloud cost management also tries to ensure that the usage of cloud-oriented services is maximized, and contributory elements like memory, storage, traffic, instances, license, network, etc. are negotiated, at the lowest possible price.
Nevertheless, carrying out such detailed cost management without a methodical approach can end up being extremely demanding for small, medium & even large enterprises. This is why most of them rely on the creation of a comprehensive and unique cloud cost management strategy.
Why should businesses have a cloud cost management strategy?
The increasing complexity of the cloud infrastructure makes cloud costs excessively difficult to monitor and track. In such a scenario, forming a targeted cloud cost management strategy can help businesses deal with issues like:
1. Shifting Cloud Costs
While beginning their cloud coverage, most businesses tend to opt for the ‘pay-as-you-go’ model. Technically, this model, when monitored, can result in significant cost savings. However, that does not happen. In the absence of a cost management strategy, businesses continue to choose incorrect packages, as a result of which they are unable to adjust with shifting cloud costs.
2. Decentralized Decision Making
In the normal course of a business, decentralized decision making has numerous strategic benefits. But in cloud management, decentralization can prove to be a major obstacle. Individuals across the organization can keep spinning up instances and accruing costs without even communicating with one another. This leaves no room for eliminating waste or fixing accountability.
3. Waste Reduction
When it comes to cloud operations, enterprises do not utilize their resources optimally. They begin over-provisioning the cloud, thereby paying for more capacity than they can actually use. Nonetheless, such poor cloud cost optimization can have grievous financial results. A well-crafted cloud cost management strategy helps reduce waste and facilitate efficient resource utilization.
4. Multi-Cloud Management
Large organizations have a constant need to manage a number of clouds, simultaneously. But with no cost management strategy or governance policy to back them up, they start facing administrative hurdles at every step. A lack of team-based synergy, appropriate tagging, metadata inputs, and automation triggers push them to the point where businesses keep overspending.
5. Inefficient Optimization
Non-optimized cloud operations generally lead to impeded workflows. This is because of a lack of visibility. It becomes extremely difficult for organizations to find out whether a process, application, or software is redundant or not. More so, even the IT teams are often not skilled enough to procure, deploy, and manage the cloud infrastructure accurately. This causes large scale inefficiency and extravagance, resulting in wasteful expenditure.
What are the benefits of cloud cost management?
With the assistance of various, specific strategies like rightsizing, power scheduling, role-based access, instance removal, and automatic scaling, cloud cost management can prove to be highly beneficial for your business.
The major benefits that this technique provides, largely include:
- A substantial reduction in cloud costs– Detailed cost management planning ensures that no expenditure is incurred on unused resources & discounts are availed on the basis of advance payment or storage volumes.
- Infusing a sense of predictability– Being aware of how the cloud costs might shape up, businesses become empowered to gather insights and make forecasts. A sudden rise in costs also does not take them by surprise.
- Better visibility of cloud resources– Cloud cost management makes sure that your cloud-based resources always remain visible to your IT teams. This works wonders in improving governance and enhancing cloud security.
- Long-term, gainful & efficient use– Proper management of cloud costs can help you identify and retain only those instances which are the right fit for your enterprise. This results in need-based, long-term, and efficient use.
And these are just the tip of the iceberg!
Cloud cost management can also help your business refine its performance and lend it an innate ability to forecast resource needs, reduce economic waste, and plan for the future.
The Way Forward
At present, almost 60% of workloads and 90% of enterprises are running on a public cloud infrastructure. More and more companies are increasingly opting for the inclusive cloud network in order to reduce their costs and improve their performances while gaining a strategic edge over all their competitors.
However, in the absence of a proper cloud cost management strategy, this extensive usage would lead to some serious, sizeable negative financial impact.
An unexpected spike in expenses coupled with large capacity wastage, and lack of optimization, has previously caused businesses to suffer monetary losses. In such circumstances, if appropriate cloud cost management tactics are adopted across various organizational verticals, this trend can be checked leading to optimization and better utilization of cloud resources. Talk to our experts to find out how.