Cloud Costs – Manageable or Out of Control?

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by | August 29, 2018

Our recent C-level and IT manager survey, “Managing and Understanding On-Premises and Cloud Costs,” uncovered many of the myths and challenges that the cloud still presents to organizations today.

Even with cloud spend on the rise – Gartner predicts worldwide public cloud spend is set to reach $302 billion by 2021 – there are still many questions and concerns for companies moving data and applications to the cloud. The Wall Street Journal points out that some companies risk overspending, often because it takes time to understand their needs in a new environment.

Cynthia Harvey, contributor for Information Week, recently wrote “10 Tips for Managing Cloud Costs” because as we discovered in our survey, the prevailing concern surrounding cloud today is not just security and performance – but cost. We found that nearly half (43 percent) of the respondents in our SoftwareONE survey felt that high costs were the number one concern when using the cloud.

This is compounded by the fact that many companies have trouble tracking and forecasting cloud spend. Our same survey found that unpredictable budget costs for cloud was the biggest pain point for 37 percent of respondents followed by lack of transparency and visibility for 30 percent. You can view more details in our recent blog.

As the Information Week article also noted, RightScale also put out its 2018 State of the Cloud Report and the sheer volume of cloud spend is making it difficult for companies to track, rationalize and manage the spend. Harvey noted that over half of the RightScale respondents reported spending $1.2 million per year on cloud services and 26 percent spend $6 million – with this number likely increasing in 2019.

So what can one do about these unpredictable cloud costs? Harvey lays out ten tips for organizations to follow including:

– Monitor spending on a daily basis
– Shut down unused or unnecessary instances
– Require tags company-wide
– Rely on automation rather than manual processes
– Consider a standalone cloud cost management tool
– Invest in a hybrid cloud management tool if your needs are more complex
– Look for a solution with machine learning capabilities
– Take a systematic approach to cloud cost management
– Watch out for vendor lock-in
– Optimize private cloud costs


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