cloud-cost-management-tips

Cloud Cost Management Tips for

Your Cloud Transition

Cloud Cost Management Tips for Your Cloud Transition

Not sure how, when or IF you should leverage cloud marketplaces?

first to understand when it makes sense to use cloud marketplaces, and how to optimize costs from the get-go.

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Cloud marketplaces are designed to help customers find and buy the software needed to support their business. The explicit act of purchasing through a cloud marketplace is straightforward and simple, but there’s more to a cloud purchase than meets the eye.

Unlike on-premises software and hardware, cloud services don’t just exist as a simple asset. Customers who purchase cloud services need to manage not only the asset, but the associated metered cloud consumption. These cloud consumption costs can spiral out of control as a business uses the software more frequently. So, even if a cloud service has a modest price upfront, the costs associated with using it can become overwhelming.

If you’re experiencing sticker shock from your cloud consumption costs, you’re not alone. Organizations often receive public cloud bills that are 2 to 3 times more expensive than expected. However, it can be difficult to understand where to start. Let’s take a look at some steps that businesses can take to optimize and manage their cloud expenses.

Understand Sources of Cloud Consumption

Marketplaces make purchasing easy, but that doesn’t mean it’s easy to create an all-encompassing budget for your cloud spend. It can be difficult to determine exactly where to begin when optimizing cloud assets, especially if you have multiple cloud services from various providers. To get an idea of which areas must be optimized, ask yourself the following questions:

  • How are we currently allocating this asset in our budget?
  • Are there consumption costs associated with the cloud service? If so…
    • Are they being charged back to the appropriate cost center?
    • Is our business planning for consumption and its associated costs to increase?
    • Does our business budget and manage the renewal through the marketplace, or through a dedicated platform?
    • Is this service perpetual or annual? If it’s annual, then how should you manage the renewal? If it’s perpetual, then how do you budget the service’s growing costs?

Once your IT team can ascertain the answers to these questions, you can start to determine the best way to manage your cloud portfolio. It’s important to get a complete view of your entire software estate and its inherent requirements before starting on your cloud optimization journey. Once you’ve found the true cost of your cloud portfolio, you can identify the best ways to optimize your cloud deployment.

Controlling Cloud Consumption Through Governance

Before acquiring any cloud assets, organizations should develop a governance model to control cloud consumption and growth. By definition, cloud governance encompasses the people, processes, and technologies needed to support your cloud infrastructure, security, and overall operations. Cloud governance is best tackled from the outset, since an organization’s portfolio becomes increasingly complex as it expands. Organizations must juggle best practices and licensing requirements from multiple marketplaces and providers, which can be daunting.

If you’re not sure where to start with cloud governance, don’t delay. Instead, think of your cloud services as a more traditional business asset – such as a newly purchased fleet of laptops. If your business purchased new laptops, IT would not be comfortable giving them to employees until the laptops were inventoried, assigned asset tags, and assigned to the users and cost centers who will use them. Then, your organization would make a plan to manage the laptops throughout their lifespan.

Cloud services are similar. Think about cloud consumption as another asset to your organization – before you let any users use the cloud service, define a process to tag resources that are deployed in the cloud. Then, by allocating tagged resources to cost centers, you will gain granular insights into cloud consumption trends and spend for business units, departments and projects.. With these insights, organizations can anticipate costs before they occur, forecast budget anomalies and evaluate ROI while your cloud services are in active use.

Knowing Tactics to Optimize Cloud Spend 

Once you’ve identified the primary consumers of cloud consumption in the business, it’s time to start identifying optimization and savings opportunities for each cloud instance. Initially, it’s best to check in with your cloud provider for their recommendations for optimizing cloud spend. Most cloud providers are willing to outline a few common optimization opportunities – such as implementing reserved instances (RI), or consolidating your virtual machines (VMs).

However, organizations can always go above and beyond the recommendations of their cloud provider. One way to do this is to consult a trusted advisor who can identify optimization opportunities. For organizations that would like to take their optimization efforts a step further, it’s recommended to find an advisor that will not only outline recommendations, but also implement them to the best of their ability.

These managed cloud services can assist with consumption reporting and chargeback, tagging new resources, creating a business structure, and more. Alternatively, organizations can find a cloud management platform for applying and optimizing cloud assets in-house. This will help your organization better allocate cloud resources, report on consumption, and ultimately managing the users and services that drive excessive cloud consumption.

Final Thoughts

The cloud is inevitable, so IT organizations must have a plan to support this accelerating demand from the business. However, if you’ve already begun your cloud journey, it’s not too late – there’s still an opportunity to gain the software-specific knowledge needed to reel in cloud-related costs. By building a governance model, leveraging the right software and soliciting the best expertise, organizations can turn their potentially bloated, expensive cloud services into a more efficient and manageable cloud portfolio.

Get Started on Optimizing Your Cloud Assets Today

Whether you’re thinking about purchasing cloud assets, or need to control existing assets, our Managed Cloud Services (or PyraCloud) can help. With our assistance, it’s simple to optimize your cloud deployment.

Discover Managed Cloud

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Author

Todd Golden

Todd Golden

Todd leads the Go To Market function for SoftwareONE’s PyraCloud solution - a software and cloud spend management platform - designed to help customers maximize their IT budget and navigate the transition from on-premises to cloud computing.

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