If you’re having trouble optimizing cloud spend, you’re not alone.
Flexera’s 2021 State of the Cloud Report revealed 79% of businesses struggle with managing cloud spend. In a business environment where many are dealing with reduced revenues, increased capital expenditures and rapidly changing operational needs, enterprises don’t need another budgeting headache.
To take full advantage of the cloud’s benefits, you must first learn how to balance cloud performance and spend. Here’s a breakdown of where many companies go wrong when managing their cloud budgets, along with steps on how to optimize your spending and usage.
How companies waste cloud spend
According to Flexera’s survey, organizations self-estimate that they waste 30% of their cloud spend on average. However, Flexera found that companies’ actual waste is 35% or higher on average.
This can happen for a variety of reasons. First, they might not fully understand their workloads’ utilization and requirements before putting them in the cloud, or they may not be familiar with the cost-control mechanisms available from many cloud providers.
In addition, too many companies neglect to develop governance for cloud deployments to keep cloud sprawl in check, and some companies integrate different platforms and applications without first considering the downstream implications that can cause costly headaches.
How to optimize cloud spend from the start
Your organization can set itself up for success by building a good foundation and establishing clear goals. This is easily the best way to stay out of trouble and avoid having to double back and make costly fixes.
Start by analyzing the workloads you’re transitioning to the cloud and align each workload with the business outcomes and processes they support to gain clear visibility into what your cloud infrastructure should look like. This enables you to see how the utilization of processes impacts resource requirements, find better ways to do things, and associate a cost with each process that allows for better ROI analysis.
Successfully budgeting your cloud spend means staying true to best practices. That includes leveraging tools from cloud providers that offer a clear view of your entire landscape to see what’s being used. When you can’t find an answer yourself, it makes sense to tap into the specialized expertise of service providers to help analyze your situation.
At the same time, avoid vendor lock-in where you can. In some cases, it might be too costly to move from one cloud to another because of the state your data is in and where it resides. One advantage of the private cloud is you can maintain ownership of data and streamline an exit strategy. Rather than focusing on one vendor, it’s more realistic to have a handle on what you’re trying to accomplish and how a cloud provider can help you reach your targeted outcome.
How to course correct if you’re already overspending
If your organization is already in a position where it has overspent, fear not. It is possible to get back on track with some attention to the right areas.
Start with an analysis of what your organization has deployed to the cloud. This will allow leadership to have a conversation about those workloads, including expectations, business functions they support and the minimum requirements they need.
From there, you can undertake a full redesign and redeployment of your cloud infrastructure, or perform a surgical-like alteration of your existing deployments. The latter is more expensive, but you must determine whether it makes more sense to start fresh or refactor what you already have.
Wasted cloud spend is a big frustration for many companies, but it doesn’t have to be. By implementing proper governance and controls, working with managed service providers and experts, and leveraging the tools and offerings at your disposal, you can keep your cloud costs under control while optimizing spend and performance.
