Cloud adoption has transformed the way businesses operate, giving them unprecedented flexibility and scale. Recent studies, however, have found that up to 30% of cloud spending may be lost, highlighting the difficulty that many businesses are having in adequately regulating and managing their cloud expenditures.
While cloud providers claim cost-effectiveness, businesses frequently discover that reality does not always match this assumption. The lack of transparency in pricing models and the intricacies associated with various cloud services lead to unforeseen costs, stemming from architectural inefficiencies, unused or overprovisioned resources, and data egress expenses.
The problem of controlling cloud costs is further exacerbated by the growing adoption of multicloud, where managing multiple providers can become a complex operation where many are caught off guard by spiraling costs due to a lack of centralized management and visibility across clouds - with each vendor having different contractual terms, price structures, performance, and security capabilities.
Managing cloud costs can be a difficult undertaking; as a result, businesses are prone to make mistakes that result in higher-than-expected expenditures. To assist you avoid these traps and maintain control over your cloud expenses, let’s look at some examples.
There are two primary approaches when it comes to cloud migration: "lift and shift" and "rewrite, replace, or avoid." The former involves moving applications and workloads to the cloud without modifications, while the latter evaluates each application and decides whether to rewrite it, replace it with a cloud-native solution, or avoid migrating it altogether.
Although the "lift and shift" approach is faster and more straightforward, it may not always be the most cost-efficient. In comparison, the "rewrite, replace, or avoid" approach may result in higher upfront costs and a longer migration timeline, but it can lead to significant cost savings overall. Therefore, businesses should carefully consider which approach is best for each workload, based on its size, complexity, and criticality, to avoid unnecessary costs and optimize performance.
Companies often choose to overprovision to avoid future downtime or performance difficulties, which results in increased costs. This is especially true for businesses that see unpredictable traffic spikes, such as e-commerce websites during the holiday season, which can result in wasted resources and unnecessary expenses. To avoid overprovisioning, it is essential to assess cloud usage on a regular basis.
Cloud usage monitoring tools can reveal which resources are being used and which are not, helping organizations to optimize their cloud resources and cut costs. Furthermore, by measuring usage on a regular basis, organizations can better estimate their demands and change their cloud allocations accordingly.
Unused resources, such as idle virtual machines, can quickly accumulate costs without any added benefits. To avoid unnecessary expenses, businesses must audit their cloud infrastructure on a regular basis to identify and decommission any resources that are no longer required.
Effective cloud management requires proper resource utilization. With a well-managed and optimized cloud management solution organizations are able to better-understand how to optimize connectivity.
Transformation costs are one of the most significant hidden indirect expenses of cloud adoption. These are the costs incurred by enterprises as they shift their programmes and data to the cloud. The process can be time-consuming and requires resources to ensure a smooth transition to handle the move, adapting programmes to work in the cloud environment, and training people to deal with new technology.
The residual costs of on-premise operations are another hidden expense of cloud adoption. Many businesses still have on-premise infrastructure that must be maintained while transitioning their clouds including maintenance of hardware and software, data centre expenditures, and human costs.
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As cloud adoption continues to soar, effectively managing and predicting cloud costs is nothing short of a Herculean task. Embracing a dynamic approach to manage cloud spend, is critical for organizations to stay ahead of the curve and remain competitive in the age of digital transformation.
With so much at stake, working with the right cloud management partner can help reduce cloud complexity, while freeing up internal IT teams to focus on core business operations and driving innovation.
At InterCloud, we understand the challenges businesses face when managing a complex cloud environment with multiple vendors. That’s why our platform is designed to reduce the need for internal teams spend a disproportionate amount of their time managing network infrastructure. We do this by streamlining and simplifying cloud operations with a central management platform and delivering managed services, so that organizations can benefit from improved visibility and control across their multicloud environments – reducing the cost chaos while ensuring maximum uptime, performance, and reliability.