Get control of your company’s cloud spending
With Cloud FinOps Diagnostic you can track the progress of your FinOps practice and lower the risk of overspending in the cloud.
It’s no question that migrating to the cloud isn’t just a trend – it’s here to stay. Today, many businesses have either already begun the process of a cloud migration or are feeling the pressure to do so. With this transition, however, many are discovering unexpected expenses and are exceeding their budget.
Does this sound familiar? If so, don’t worry – it’s practically a given when it comes to the typical cloud migration. With a little expert guidance, your budget could be back on track in no time.
Here we explore the ins and outs of cloud migration, identify some of the reasons for these unexpected expenses, and detail how Cloud Financial Management (FinOps) not only helps you get your cloud spending under control, but creates a culture of accountability – ultimately ensuring ROI on your cloud spend.
To better understand how cloud migration leads to unexpected costs, it’s important to first understand what this migration entails and how it differs from the traditional data center. The cloud itself is a collection of computing services accessed through the internet. Instead of hosting all of your company’s computing needs on-premise, the cloud provides access to a wide variety of tools and resources in a way that enables easy scaling and flexibility. This is great for speed and innovation, but has completely changed the roles finance and procurement play. The checks and balances with traditional capital expenses often don’t exist with cloud services, as it impacts the benefits of cloud.
Cloud migration is the process of moving your company’s data, workloads, IT resources, and applications from an on-premise environment to the cloud. Some of the migration strategies include the following:
Some legacy applications may not be supported in the cloud and need to be replaced during the migration process. Other legacy applications may be eliminated entirely during the process as they are no longer needed. Still, other applications may simply need upgrading for a successful migration. Clearly, migrating to the cloud is not one-size-fits-all.
When faced with this complexity and the speed with which it happens (along with fewer checks and balances as to total cost) organizations often end up with inaccurate forecasting and no simple way to resolve it.
Companies are realizing that the benefits of cloud migration increasingly outweigh the risks for most use cases. However, understanding the risks and benefits in more detail allows companies to make more informed decisions in regard to their cloud migration strategies. With a proper cloud operating model, these decisions can be made with more accurate forecasting and business cases to show ROI.
The benefits of cloud migration include the following:
Risks associated with cloud migration include the following:
And of course one of the biggest risks of cloud migration is unexpected cost. An article recently published in the Journal of Cloud Computing titled, “Cloudy transaction costs: a dive into cloud computing economics” by Rasha Makhlouf determined that more than 70% of companies that moved to the cloud were not aware of many of the associated hidden costs of cloud migration.
If you have migrated to the cloud recently and the price tag is more than you planned for, you aren’t alone. As mentioned above, many businesses that migrate to the cloud end up spending far more than they intended either during the migration process or on an ongoing basis.
Reasons that companies overspend are numerous, and include the following:
According to Flexera’s 2020 State of the Cloud Report, organizational spend on the public cloud is currently 23% over budget and expected to grow 47% in a year. In fact, 73% of survey respondents stated that their top cloud initiatives for 2020 included trying to optimize their existing use of the cloud for cost savings.
Migrating to the cloud is an important step for many businesses in the modern world. As overwhelming as the process may seem, it is becoming a necessity. However, costs are piling up for many companies as they struggle to keep expenditures under control.
Fortunately, SoftwareOne’s Cloud FinOps Diagnostic can help your company take control of spiraling costs and enable the cultural shift in how your organization views cloud spend. Cloud FinOps Diagnostic establishes a baseline across your business on cloud maturity and shares best practices along the way that inform cost-saving measures while enabling innovation. It allows you to see the cloud as a money-making measure – instead of an expense.
After completing an assessment, the next steps are to use the insights obtained to improve your company’s cloud use and spending. SoftwareOne can additionally assist your company’s IT team with the following next steps:
SoftwareOne has helped customers who were experiencing variances of 20-50% on monthly billing cycles take control of their cloud spending, and our experts can help your company do the same.
With Cloud FinOps Diagnostic you can track the progress of your FinOps practice and lower the risk of overspending in the cloud.