A recent industry survey of 100 IT decision-makers from large companies showed that 68% of IT departments use public cloud infrastructures. Of these, 80% have moved at least a quarter of their information to the public cloud. Amazon Web Services, Microsoft Azure and Google Cloud Platform battle for market share. As a result, competitive pricing, improved features and better terms have attracted companies looking for ways to streamline their IT. Cloud providers are offering nearly anything as-a-service, with various IaaS, PaaS and SaaS deployment offerings. While these can create a secure, cost-effective and seamless way for companies to manage data and run critical business applications, they also introduce unexpected software license management issues.
“More and more businesses are moving to the cloud – and sticker shock is setting in.” – ZDNet
As CIO notes, variety within price, business requirements and features may force IT leaders to engage more than one cloud vendor. Others may want the flexibility of multiple cloud vendors to meet distinct business goals, like general-purpose operations versus application development or real-time analytics and retail personalization.
But more complications emerge when a multi-cloud dynamic sits within a broader public cloud strategy.
One estimate from the IT leader community site Enterprisers Project suggests that companies will waste more than $14 billion on unnecessary public cloud infrastructure this year. Resource-saving efforts like basic cost-optimization planning and cost management practices such as shutting down workloads after hours, right-sizing instances and leveraging discounts get convoluted as the number of vendors grows.
In similar research, one cloud management consultancy notes how assuming public-cloud deployments are de facto cost savers is the first mistake IT leaders tend to make – and sets them up for strategy failure.
Mor Cohen, cloud CTO at Tubronomic notes in another industry report that “[…]many companies are in the habit of overprovisioning to ensure application performance, but this means they’re typically paying for peak usage 24/7. As a result, they eliminate one of the key points of cloud infrastructure – that it can grow or shrink based on application demand.”
From a software license management perspective, multi-cloud implementations can introduce new tools and requirements that are native, or specific, to that public cloud. Companies can end up with complex, expensive and varied tools to operate the applications in the various IaaS they’re running on top of.
It’s not all speed and agility
Andy Jassey, President of Amazon’s AWS business, is right to suggest in a recent Mad Money interview that companies can improve speed and agility by using the public cloud to build and iterate on development ideas. But it’s his follow-on point that is illuminating when it comes to AWS and other cloud providers’ parallel mission to hook and upsell clients:
“Because we have 165 services that you can use in whatever combination you want, you can get from idea to implementation in several orders of magnitude faster, so you can innovate much quicker.”
Price-point advertising is what gets customers in the door.
But this is just the beginning.
After engagement, companies are persuaded to adopt more services, inspired by cloud providers’ messaging around speed and innovation opportunities. Once customers have said ‘yes’ to moving from on-prem to the public cloud, the ubiquity of click-and-deploy marketplace subscriptions, from AWS Marketplace, for example, are an attractive next step. AWS makes it seamless to procure these solutions – with a variety of SaaS contract types – to complement infrastructure investments.
Without effective control measures and a strategic plan, public cloud spend may creep well past what was originally scoped or intended.
Regain license visibility
In a recent article profiling companies’ rush to the cloud, The Wall Street Journal cites common examples of failed business cases driven by poor software license management and overspending:
“By purchasing more cloud computing capacity than they really need – even as a deliberate strategy to safeguard against crashing key systems — or buying advanced reserves that they will never use, companies across all industries may be overspending on cloud services by an average of 42% […] That can translate into hundreds of thousands or even millions of lost dollars in IT budgets a year, depending on the size of cloud deployments […] ”
For some, transitioning IT infrastructure to the cloud often proves to be “too much of a good thing” and demands a concerted right-sizing effort.