The Key to Cloud Cost Optimization and Governance
More businesses are making the shift from onsite IT infrastructure to on-demand cloud service offerings with trusted providers. This transition is helping enterprises allocate resources more appropriately toward items like innovation and growth, while mitigating risk with flexible solutions based on their monthly needs.
With this shift comes a need to remain aware of budgets and cloud spend. Businesses are no longer working with annual payment processes, but need to monitor and adjust their spending based on public cloud usage each month. While businesses no longer need to predict the future long-term, they do still need to account for and predict near-term changes on an ongoing basis.
Transparency, an understanding of spending and ways to identify wastage through budget monitoring are key. Effective solution providers should work hand-in-hand with business leaders to identify efficiencies and optimize their cloud spends. While cloud spends are now on-demand and flexible, they need to also be predictable.
Why real-time monitoring of cloud spend is critical
Investments in cloud infrastructure are becoming larger than ever before. Gartner analysts predict that half of the global enterprises currently using the cloud will have gone all-in on it by 2021.
Business leaders are more eager than ever to increase their cloud usage and scale existing applications, a demand which is predicted to translate to $284 billion in cloud infrastructure services spent by enterprises by 2024.
With businesses placing these substantial resources in the public cloud, it is crucial that they remain highly aware of their cloud spends. The challenge which comes with these on-demand service providers is that IT professionals often take a more hands-off approach.
Professionals often take the time to analyze and track their cloud spend data for the first few months when working with a new provider. However, once a level of trust is built, they tend to take a backseat. The result: professionals lose sight of opportunities for efficiencies to reduce their cloud costs.
This year, wasted cloud spend is expected to exceed $17.6 billion. More than $11 billion of this wastage is expected from idle resources, while the additional $6.6 billion is attributed to oversized resources. These numbers are often the result of a lack of access to effective data.
Gartner predicts that enterprises that lack cost optimization processes will average 40% overspend in public cloud this year.
How to overcome the cloud wastage trap
So how can business leaders effectively predict future cloud spends to avoid wastage? The responsibility must be shouldered by both IT and finance professionals.
When IT and finance executives collaborate to ensure budgets are tracked and authorize usage of cloud resources, they can begin to see results. These teams should work together to uncover key insights to the enterprises’ stakeholders for sign off.
IT professionals should serve in a thought leadership role to identify the right provider for their company and ask key technical questions in the onboarding process. However, finance team should provide key input during the transition and after it by monitoring spending and ensuring forecasts and budget reports are being produced in tandem with real-time insights.
While one may assume that well-designed, easy-to-use dashboards can help them easily stay on top of monitoring cloud costs, this is rarely the reality. It’s important to select an experienced vendor who can provide transparency and insights, as well as resource usage via alerts, hierarchies of permissions granted and other cost-saving tactics.
It’s all about being in control
Effective cloud financial governance is based on control. The ability to designate set permissions and hierarchies to individuals in the enterprise cannot be downplayed. Businesses can also benefit by controlling cloud spend with set quotas, alerts which notify users of spends, as well as establish caps on services. With the right rules, companies can troubleshoot overspending issues before they occur.
Businesses can also control the rate at which cloud services are consumed. Users can establish resource quota policies and set alerts to make key decision makers aware of increased cloud usage. Proactive approaches allow leaders to take a more hands-off approach daily, knowing they’ll be alerted quickly should issues arise.
Selecting the right solution for cloud optimization and financial governance
While it’s important for IT and finance professionals to remain aware of key insights and data to inform their forecasts and budgets for cloud spend, working with a trusted partner removes manual processes and allows for more predictability.
You want a partner that can provide key customization tools, alerts and notifications on usage. Enterprise leaders also want the ability to designate user roles so they can rest assured that they’ll be notified of unusual behavior or wasted spend before it occurs. These insights will allow them to optimize the provisioning of resources and spend to keep themselves off the list of companies expected to contribute to the $17.6 billion wastage of cloud spend this year.
Hystax OptScale was designed with financial governance in mind. As a one-stop solution for all cloud management and IT financial needs, OptScale users are provided with transparency, including a 360 degree IT budget breakdown that is easy to digest, react to and optimize.
For a deeper dive into the industry benchmarks, trends and best practices of cloud cost optimization and governance, mentioned above, plus many more trends and insights, feel free to download our whitepaper.