According to Flexera's 2020 State of the Cloud Report, the top cloud initiative for organizations is to "Optimize existing use of cloud (cost savings)." Yet, less than one-fourth of respondents say they're efficient in identifying wasted IT spend. Now more than ever, organizations need to maximize their value in license assignments, and this can only be accomplished by a formal license compliance process. Meanwhile, most organizations are planning to increase their cloud spend, and Gartner shows that in 2021 this is expected to rise by 18% to $304.9 billion - up from $257.5 billion in 2020 - with no signs of slowing down through 2024. To help you preemptively address concerns with your cloud budget, we have outlined six ways that you can optimize wasted cloud spend.
Cloud Waste: Unused & Idle Resources
Cloud waste refers to unused and idle computer resources that a company is paying for – but not consuming. As more companies opt to move their IT infrastructure and applications to the cloud at alarming rates, the phenomenon is exploding. According to DevOps.com, in 2020, companies wasted over $17 billion in cloud spend on idle and excess resources (which we will touch on below). By engaging in an assessment of your cloud estate, we can uncover machines that are sitting idle and are unused so that you can have a plan in place to retire the resources.
Right Size and Optimize Compute
The process of right sizing entails analyzing computing services and modifying them to the most efficient size. When cloud administrators have close to 2 million possible outcomes to choose from, it becomes difficult to size an instance correctly. On top of choosing the proper server sizes, there are also options to choose between servers optimized for memory, database, storage capacity, computing, graphics, throughput, and more. When choosing to right size, you are choosing to do more than reduce cloud costs. Right sizing also helps with cloud optimization, which allows you to achieve peak performance from the resources for which you're paying.
Leverage License Benefits
When it comes to matters of the cloud, it is especially critical to have flexibility with your licensing options. There are a variety of ways to reduce cloud spend by leveraging license benefits. Some of these benefits include the option to Bring Your Own License (BYOL) or License Mobility, use Azure Reserve Instances, and utilize Azure Hybrid Benefits.
- Azure Hybrid Benefit is a cost-savings benefit that lets you bring your existing on-premises Windows Server and SQL Server licenses with active Software Assurance or subscriptions to Azure.
- Azure Reserved Instances (Azure RI) to help save on long-term VM usage. By committing to a one or three-year benefit, customers can now reserve VMs in advance at a deep discount, saving as much as 82% off standard pay-as-you-go pricing.
- BYOL or License Mobility; There are opportunities for you to extend your licenses into any cloud. The challenge here is understanding the compliance implications and which licenses are applicable.
Cloud Sprawl is the uncontrolled and excess reproduction of an organization's cloud instances, services, or providers – and it's certainly not new to the world of IT. When sprawl occurs, security is at risk, and organizations can become weighed down financially by unused resources. By ridding of these unused or duplicated resources, you optimize your costs and free up important space in the cloud.
Automation and Scheduling
Cloud automation and scheduling refers to the processes and tools organizations use to reduce the manual efforts of their employees. For most organizations, the truth is that not all Virtual Machines and resources need to be available 24x7. By automating and scheduling jobs during specific time frames, organizations can cut down on the cost of resources required for that job. For development and test environments especially, there is an opportunity to save costs with the cloud when it's not in use at night and on weekends.
Governance and Policies
Cloud governance helps put in place the required framework for employees to easily request and access cloud resources, whereas the policies are the guideline under which organizations operate in the cloud. Cloud governance is key in optimizing your cloud spend because it makes it easier to manage your cloud resources, curb shadow IT, reduce risk, and reduce labor. When dealing with policies, there are four built-in policies to consider – storage account SKUs, setting VM size limits, controlling resource types, and deploying resources in a strategic location. Using these policies wisely can help organizations cut down on and control their cloud spend and proactively stay in control of their environment. /li>
While all of these suggestions will help you identify opportunities to save on spend, it is important to recognize that each adjustment does not act independently. When one action is manipulated, it can have an adverse reaction on another. Remember to take a step back and look at your entire cloud estate and understand your dependencies. SoftwareONE has built this knowledge and can reduce the trial and error by providing an end to end assessment and action plan. We take a holistic approach when addressing your cloud environment and consider both licensing and technology enhancements, which has historically saved organizations 10-25% of their cloud costs on average. Once we've uncovered, rightsized, and applied appropriate governance and policies, we will then look to manage with a monitoring strategy that can reduce the uncertainty and complication billing. SoftwareONE's proprietary PyraCloud service allows you to easily grow with the business demand, both with SaaS and IaaS offerings while giving you control to distribute the consumption costs to the departments driving its use.