Cloud Native / Cloud Services

Control Cloud Costs with Organizational Alignment, Not Just Software

28 Feb 2019 11:45am, by

Spending on public cloud computing continues to increase and with it interest in ways to control cloud budgets. Two recent studies show that changes in IT responsibility and coordination with other departments often determines how much of a problem “uncontrolled” cloud spending.

IT and Finance clearly need to better align their management of cloud costs, according to 451 Research’s “Cost Management in the Cloud Age” (sponsored by Cloudability). While 40 percent of respondents in IT roles say their budgets and forecasts are accurate, only 26 percent of those in finance roles say they rarely go past their cloud budgets. Finance can get a better view of spending if it works closely with IT, but for now, only 28 percent of respondents formally collaborate across both IT and Finance.

Another way to prevent surprises in cloud spending is for IT to share the reporting they may already be getting about real-time changes in expected cloud consumption. Despite widespread use of dashboards by IT, most metrics don’t get integrated into CIO dashboards, with much fewer going into what the CFO looks at. Without a culture of accountability across departments, many cost management tools are liable to become shelfware.

Another reason for the disconnect between IT vs Finance view of cloud spending may result from cloud spending coming outside of IT. In fact, 38 percent of companies have business units with their own cloud budget according to the “RightScale 2019 State of the Cloud” report from Flexera. Even if the business unit doesn’t have its own cloud budget, they are still significantly less likely to believe the central IT function should be responsible for managing and optimizing the costs of cloud services.

Other Ways To Reduce Cloud Spending

  • Right-sizing: Perhaps the easiest way to lower cloud spending is to right-size an organization’s virtual machines (VMs). In other words, making sure you are not paying for a large instance when it is usually underutilized. Companies that spend a lot of money on the cloud are better at this than others, but even those spending $1 million a month on the cloud, only about 55 percent of VMs are correctly sized for their workload according to respondents to the 451/Cloudability report. The RightScale/Flexera study is a bit more optimistic about rightsizing, but even its report shows that only 30 percent are automatically rightsizing.
  • Cloud Brokering: Automated cloud brokering of cloud services from multiple cloud providers is currently not realistic for complex workloads. Software tools can help, but for now, 451 Research’s Owen Rogers believes that you still need someone to take the data and recommendation from the tools and then makes qualitative judgments about business priorities and risks.
  • Moving Back to Private Cloud: Repatriating workloads to private clouds and on-premises data centers is a real way to save money for certain types of workloads. However, on average companies are still moving much more workloads to the public cloud as compared to migrating them in the other direction.
  • Software: For just a few examples, check out IT Central Station’s reviews.
  • Multicloud: One of the top reasons to have a multicloud strategy is for negotiating leverage with incumbent providers.

Featured image via Pixabay.

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