CDW Blog

Are you spending too much on cloud services?

28 May, 2019 / by Lauren Waterhouse

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As cloud adoption escalates, so do the associated costs. Cloud computing expenditure now accounts for around a third of an average company’s IT budget, according to research by IDG Enterprise.

It is therefore imperative that cloud spending is carefully managed.

Whilst organisations are weighing up the commercials relating to cloud migration against the tangible benefits of these new platforms, they must be careful not to lose sight of optimisation, which relies constant management. 

However, our conversations with enterprise IT leaders suggests that the uncontrolled cost of using cloud platforms is a significant cause for concern. This view is supported by several pieces of research, including a report from Gartner suggesting many organisations are ill-prepared for managing cloud costs.  Upon the release of that report, its author, analyst Marco Meinardi, noted that the traditional model of over-architecting data centres with hardware sized to serve the maximum expected workload demand had been turned on its head by the rise of cloud infrastructure.  Because of the cost structures that apply to cloud usage, correct sizing of deployment is essential to avoid overspending. 

 

Planning 

To help business and IT leaders identify and adopt the most cost-effective cloud solution for their needs, we offer a range of highly specialised cloud services. These begin with CloudPlan, a strategic methodology, combining skilled consultancy and best-of-breed toolsets to establish a financially robust and risk-free roadmap for the cloud journey. Key components of this service include the assessment of legacy contracts, objective setting and benchmarking, development of a sustainable and transparent budget and planning how different application types will be assigned to the most suitable environment. This meticulous design process minimises the risk of gaps that can lead to overspend.

 

Optimisation

Since business needs rarely stand still, cloud adoption patterns must evolve accordingly. At the same time, differing rates of adoption in different areas of a business often creates inconsistencies, increasing the risk of uncontrolled sprawl across the estate. Virtual servers may be charging by the month, hour or second, and new services can be brought online at any time by any part of the organisation. In this dynamic climate, fuelled in some enterprise environments by hundreds of different cloud services, it is not surprising that overspend can occur.

 

Tracking

Efficiency depends on ongoing vigilance and regular reappraisal of usage patterns. The foundation of cost optimisation is establishing visibility across the estate. Only with such monitoring in place can workloads and vendor agreements be proactively managed to drive maximum value for money. We being proactivity to the heart of cloud services management, with monitoring tools that shed light on areas previously hidden from view. Based on analysis of cost and usage trends, cost optimisation strategies such as tagging and chargeback can be implemented to ensure ongoing efficiency. It may also be possible to introduce volume discounts and reserved instances. Renegotiation of licences, auto-scaling and close management of peak usage periods can all be economic levers.

 

Our CloudCare programme provides comprehensive support for organisations utilising or planning to utilise the public cloud, with ongoing cost monitoring and advanced reporting that enables rightsizing.

 

What’s important is that there are good commercial reasons to underpin the planning and an understanding of the technology, services and applications which are suited to a cloud migration. In practice, that might mean a lift-and-shift approach to infrastructure-as-a-service or, alternatively, re-architecting applications into code which can be run more effectively. Our deep understanding of the market helps organisations navigate through their decision-making process, helping remove risk from the transition by using our experience across the many hundreds of customers who we’ve assisted in their migrations to cloud services. 

 

Cloud adoption often represents a major financial commitment and we are dedicated to helping customers drive the maximum value from these investments.

 

To find out more please visit Microsoft Surface or give us a call 020 7791 6000

1 https://www.gartner.com/doc/3769138/comparing-tools-track-spend-control

2 https://blogs.gartner.com/marco-meinardi/2017/11/27/new-research-how-manage-public-cloud-costs-amazon-web-services-microsoft-azure/

Topics: Cloud