Blog May 16, 2019

The Biggest Challenge for Your Cloud Strategy: Managing Costs

The rapid growth and adoption of public cloud use, including enterprise adoption of multi-cloud environments, is creating new visibility challenges. That’s the conclusion of a 2019 report by Kentik, which surveyed 310 conference attendees during the AWS user conference held in Las Vegas.

While this study focused particularly on AWS users, it is reflective of a wider trend: Enterprises are building more and more multi-cloud environments but are beginning to buckle under the weight of managing and optimizing their various cloud resources. Specifically, cost is becoming a major concern as more and more services and infrastructure are moved to public clouds.

The Elephant in the Room: Cloud Costs

Kentik’s study found that a full 29% of respondents identified “cost management” as their single greatest cloud management challenge. And a more extensive study done this year, by RightScale, found that 64% of enterprises felt that optimizing their existing use of the cloud, especially when it came to costs, was their top priority moving forward.

It shouldn’t be surprising that cost containment is a concern. One of the major reasons organizations turn to the cloud is to minimize their investment in hardware and better control IT costs. But as needs and usage continuously change and scale, managing those costs becomes a job in itself.

(See our article, “3 Reasons Organizations Fail to Optimize Cloud Costs.”)

And it’s clear that many organizations simply lack the appropriate tools to do this. For example, the Kentik study found that a full 10% of respondents admitted they were still tracking AWS costs with spreadsheets. And an additional 10% of respondents reported not tracking costs at all.

Hidden Costs of the Cloud

Another big reason organizations struggle to control their cloud costs is that they fail to anticipate additional charges that can accrue as their cloud resources are used. For example, additional charges can occur for:

  • Customizations
  • Egress/passing data between multiple clouds (egress charges)
  • Additional disaster recovery
  • “Orphan” snapshots left behind when instances are deleted
  • Access for remote workers
  • Unused static IP addresses
  • Storage for old/obsolete data

Getting Better Control Over Your Cloud Costs

To get a more accurate picture of your cloud costs, it is well worthwhile to take an inventory of your cloud usage and review your billing and SLAs. Once you have a better picture of both your needs and your costs, the better position you are in to make the two match.

Then, we recommend the following steps for getting better control over your cloud costs:

  1. Get the right tool. Leave the spreadsheets behind. Get a cloud-agnostic support tool like TRiA and use it to monitor all of your cloud usage from a single pane of glass.
  2. Shut down unused or unnecessary instances. Not all of your instances need to be run 24/7 according to your highest loads. Shut down those that are unused, or likely to be unused in the near future.
  3. Downsize over-provisioned instances. According to some studies, roughly more than a third spent on instances is on VMs running at under 40% of capacity. Scale these down to prevent waste.
  4. Go native. If you have applications that were just migrated to the cloud using lift and shift, they probably aren’t working as efficiently as they could be. Start the process of changing these to cloud native apps.
  5. Use automation. Using automation of policies to do basic cloud management speeds up management steps while reducing error. For example, you could be using automation to rightsize instances, eliminate active (but unneeded) storage, locate the lowest cost regions available, and generally scale your operations as needed.
  6. Create notifications. Set up alerts and notifications to alert you when certain financial situations arise. For example, you can be notified when a given monthly spending limit has been reached, or when your number of instances suggests switching to a different pricing plan.
  7. Avoid vendor lock-in. This is one of the big reasons to use a multi-cloud environment to begin with. If you are dealing with multiple vendors, you can find which ones offer the most cost-effective services—if you have the right monitoring tools (see #1).

For more, check out:

Our article: “How to Optimize Your Cloud Investment

Follow up with: “Selecting a Managed Service Provider for Your Cloud Journey

Demo: How TRiA can optimize your cloud spend

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