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How to Tackle Rising Cloud Costs

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Published on August 2, 2022 by

Paul Deur

For many enterprises, moving to the cloud promised savings in terms of hardware, power, and maintenance, but now as digital transformation programs accelerate and more workloads are virtualized, costs are rising. Given that a full enterprise cloud transformation will be managed over multiple years, providing support for a hybrid environment of on-premises and cloud facilities will initially add to costs. But, as that journey progresses and on-premises costs reduce over time, teams need to be aware of the potential for cloud costs to become bloated if left unchecked.

Earlier this year, Gartner said it expected enterprise public cloud service spend would grow from 9% of global IT budgets in 2020 to more than 14% in 2025. Any cloud transformation program requires a strategic plan, beginning with an audit of your environment to understand which workloads and applications you can and should move, and what you can end support for. If managed the ‘lift and shift’ way, budget will be consumed very quickly. And if you don’t keep an eye on cloud usage, or what you are spending on, you could be paying for more than you need.

Manage rising cloud costs

If you find that your enterprise cloud costs are rising, you can employ a few methods to tackle them:

Audit applications: Costs can quickly rise when you’re still paying for old or underused applications. While it sounds obvious, what you put in place a couple of years ago may not be relevant now. Think of what was spent to keep the business going and teams productive during lockdowns. With many back in the office do you still need all that capability? If your company, like many others, has been through a merger or acquisition, you could be forgiven for losing sight of the applications you use and need. There could be overlap. What applications aren’t being used? Could you benefit from cost savings by rationalizing your apps? If you don’t understand current usage levels, you could be overpaying.

Conduct regular audits to understand application usage levels and survey teams and app owners to determine their importance to business and departmental usage and understand if they can be eliminated.

By understanding usage, you can right-size license costs. You could be overpaying for more than you need or save by purchasing group licenses rather than individual ones. This can be amplified by shadow IT which is made easier in the cloud. If multiple departments use the same applications, without IT’s knowledge there is a potential for overspend.

Leverage autoscaling and scheduling: If you know the usage and resource needs of applications you can leverage cloud autoscaling to ensure your workloads have access to the cloud resources they need based on demand. This is achieved by defining a ‘baseline deployment’ of the resources a workload requires as well as the policies and rules on when to scale up those resources. This ensures you only pay for what you use when you need it.

if your business allows, you may also be able to use scheduling and shut down access to underused cloud resources out of normal business hours.

Reevaluate single vs multi-cloud options: You may have adopted a multi-cloud approach for redundancy, resilience, or pricing reasons, but do those reasons stand the test of time? You may find that moving to a single cloud solution offers the capabilities you need with a discounted pricing structure.

Use your providers built-in cloud cost optimization tools: Again, it sounds obvious, but administrators can leverage cost optimization tools to understand how resources are being used and right-size your needs appropriately if you’re paying for what you don’t use.

Consolidate billing: If you have different cloud accounts for different projects with the same provider, consolidate into a single account to see where you could make cost savings. By analyzing bills and understanding which services have the highest costs, you can prioritize what you need in line with your budget.

While using the cloud cost optimization tools you have access to will get you some of the way, without a clear picture across your multiple cloud resources, you may still be overspending. You need to know where to place future workloads to optimize costs and you need to understand usage in real time. Working with disparate cloud management tools you’ll be lost in a mountain of spreadsheets, trying to understand dependencies in a dynamically changing environment.

Leverage automation to tackle rising cloud costs

Using a digital platform conductor (DPC), you can cut the time and effort of regularly auditing and tweaking your cloud environment to optimize costs. A DPC connects to all cloud management tools (as well as all on-prem data sources) to automate data aggregation. You can also benefit from a DPC’s orchestration capabilities to automate tasks that you would traditionally manage manually.

  • Gain a clear view of the resources you have in the cloud and all dependencies.
  • Find out what you don’t know (Shadow IT) and align license costs with usage.
  • Cut the time and effort of trying to locate app owners for rationalization activities by easily identifying the teams that use them.
  • Automate communications, such as surveying app owners and teams to understand which apps can be consolidated or eliminated.
  • Make more informed decisions about where to place future resources, armed with in-depth knowledge about resources and CSP costs.

 

Book a demo, to find out how ReadyWorks can help you tackle the growing cost of enterprise cloud.