A proactive approach to optimizing cloud spend

A business without the cloud is as rare today as one without the internet. It’s less and less possible to compete without cloud benefits like scalability, reduced operational costs and ease of use, among others. At the same time, efforts to optimize governance and reap greater ROI with cloud computing in many cases have come up short. Some estimate that wasted cloud spend exceeded $14.1 billion as of 2019.

In the on-premises world, IT leaders must manage budgets, outlays and costs in long, multi-year cycles. The cloud requires a more dynamic world in which businesses pay for what they use. This requires operations teams to make decisions that affect the cost and size of their cloud architecture every day, which slowly increases their cloud spend.

Optimization tools play a crucial role in providing visibility into cloud spend, as they institute a granular level of cost allocation, and create team-level budgets and expense trackers. These tools help businesses assess the root of expenses and monitor idle resources, thus enabling them to better manage cloud deployment costs.

A Cost Management Rx

We worked with a leading pharmaceuticals organization to reduce its cloud expenditures, which were well above original estimates. Using a dedicated cost management solution, the company was able to obtain accurate estimates on its cloud spend, thereby delivering much needed operational transparency and service optimization. 

The pharma also wanted to track its cloud usage, trends and future forecasts. Using dashboards for both services and accounts to monitor its cloud usage, the organization now receives rightsizing reports that have helped it realize roughly 15% to 20% savings on its cloud spend. The client has also been able to rightsize the cloud footprint, remove orphaned resources and disconnect unassigned network resources such as unused IP addresses. 

Reining in Cloud Costs

With cloud spend optimization tools, businesses can more easily visualize and act upon spending trends to enhance ROI. For instance, our solution enables organizations to prepare monthly and annual forecasts, which provide insights into cloud spending gaps and anomalies.

Moreover, various departments in an organization can rally under a single umbrella of cost management solution, thus rationalizing the investment in such tools. The result is a centralized monitoring approach to cloud spend that diminishes waste across functional areas, which is often not possible with existing ad hoc approaches.

Cloud spend optimization also emphasizes the notion of “idle resources” – possibly the highest expenditure in your cloud spend. Most customers have little insight into how resource mismanagement eats into their profits, and even if they do, they don’t know where to start to fix the issue.

To accelerate their cloud investment returns, organizations must continuously identify and remove idle virtual machines and unused unattached disks. The sizing optimization and inefficiency reports in our approach reveal a further plan to effectively allocate cost and usage.

Keeping an Eye on Expenditures

As the cloud becomes the rule – not the exception – organizations must find ways to differentiate by using the cloud to fuel more innovative and productive work. Rightsizing and optimizing cloud spend through continuous monitoring is one vital way of achieving this.

Of course, trade-offs exist in the real world. As your organization throttles up its cloud dependency to reduce infrastructure costs, spend is likely to disproportionately increase. But monitoring cloud spend is an investment any organization must make for its future success – and for ROI reasons, sooner is better.