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Cooling down your cloud expenditure without raining on your parade

Image: Adobe Stock / jullasart

Control over cloud cost has become a hot topic all around the globe, with even The Economist asking whether expenditure on the services of Google, Microsoft, AWS nand Alibaba is fully justified in business terms.

Nobody doubts that cloud hyperscalers have introduced millions of businesses globally to the power of data-driven innovation and operational agility. These advantages spur cloud growth, along with the adoption of hybrid working, the explosion of indispensable SaaS applications and the increased employment of virtualisation, edge computing and containerisation. The typical enterprise may now use as many as 1,200 different clouds including commonplace applications such as Microsoft Exchange or Salesforce.

Enterprises are also preparing in a serious way for 5G, and the adoption of AI and machine learning applications. By 2025, Gartner predicts that 95% of new digital workloads will be on cloud-native platforms compared with 30% last year.

Cost problems emerge

Alongside resource flexibility, innovation and agility, the cloud should introduce economies of scale that reduce the cost of data storage and computing. This has been a major selling point. Increasingly, however, as cloud usage continues, many companies encounter problems with cost. Often, organisations find it difficult to predict their requirements or to optimise their use of cloud resources when faced with the complexity of major vendors’ charging structures. Over-provisioning is common, as are unforeseen data egress charges.

The Flexera 2021 State of the Cloud Report found that while 92% of enterprises use multi-cloud and 82% hybrid infrastructure, respondents estimate that they waste 30% of their cloud expenditure, which is a significant tranche of anyone’s budget.

As a result, keeping a lid on cloud cost has become a business necessity, especially when enterprise infrastructure is now so complex, stretching across multiple cloud vendors and on-premises data centres. In many sectors, such as accountancy or banking, organisations have business-critical applications that are not cloud-compatible, requiring them to be on-premises.

Market intelligence firms agree that such hybrid cloud infrastructure will continue to grow. MarketsandMarkets predicts demand will expand at a compound annual growth rate of 17% into next year (2023). When fully optimised, a hybrid cloud strategy should allow businesses to use revenue-generating applications while maintaining older, more traditional workloads cost-effectively. In practice, hybrid infrastructure can run wild unless companies have access to efficient and user-friendly management tools or platforms.

Poor visibility racks up costs and misalignments

Lack of visibility is a large part of the problem. In the Thales 2021 Data Threat Report, only 24% of organisations responding said they had complete knowledge of where their data is stored. This absence of oversight and reporting obscures cloud environments, leading to difficulties in designing cloud services and forecasting.

As they struggle to monitor data and applications, organisations find that right-sizing cloud deployments for maximum efficiency are tough, especially where IT teams lack experience. Companies often misalign traditional workloads in the cloud using a ‘lift-and-shift’ method. The importance of gaining bang for each cloud buck means organisations should run as close to their configured performance limits as they can without holding back their applications. But after spinning up extra cloud capacity for a specific need, it is all too easy for it to remain longer than required, incurring unnecessary costs.

How cloud providers should help

Since cloud cost depends on usage over a billing period, businesses need to see where their monthly spend is going. Cloud providers should give their customers the ability to break down their monthly invoices by the type of resource used, their subscription and where it is deployed.

They should offer several vendors and services as part of a collaborative process of managing cloud cost. They should also deploy tools that allow engineers to provide cost optimisation reports, identifying the most suitable environment for their clients’ services.

Controlling costs boils down to strategy, however. Certain services are simply not ready for the cloud, so organisations should prioritise efforts where the greatest value can be gained.

An optimised cloud purchasing strategy should align to a cloud adoption and transformation framework, working to the key principles of discover, plan, implement and decommission. In this way, the framework will deliver continuous improvements, while the ability to use new technologies will introduce cost savings and provide value for money.

New tools for optimisation of hybrid cloud

With hybrid cloud now so critical to business success and innovation, enterprises also need access to next-generation management platforms. The hyperscale cloud providers already provide their own tools for hybrid cloud management, such as Google Anthos. Although this is significant, given their intense competition, it is open to question how vendor-agnostic such platforms are in practice.

The hyperscalers are also behind the curve on edge computing, which is fast emerging as the next major development in enterprise IT infrastructure. Edge computing should remove the disadvantages of location, shifting some data and workloads to regional data centres, close to where businesses want to use them, delivering faster, low latency responses through 5G connectivity. This enables many advances such as AI-driven automation, the myriad applications on the internet of things (IoT), self-driving vehicles, remote diagnostics and treatment in medicine and fast streaming applications in gaming.

A comprehensive platform

It is for these reasons organisations should be using cloud management platforms that encompass the edge. This will enable them to optimise all their current cloud deployments and connectivity, expanding their use of IaaS, PaaS and SaaS applications while preparing for the edge.

These next-generation management platforms offer a comprehensive view of a company’s hybrid and edge infrastructure from one screen, enabling organisations to optimise costs and performance wherever assets are. They can see monthly expenditure, with invoices available by resource type. These advanced tools assess cloud workloads and provide comprehensive asset discovery, usage reporting and dependence mapping.

The benefits are significant. Businesses obtain a consistent, all-round and current view of costs, enabling them to follow a thought-through cloud strategy that includes their on-premises and edge estates. With such advanced visibility and control, they can shift and adapt workloads for maximum operational efficiency and cost-effectiveness. Each application is visible, as is real-time usage of cloud and edge resources. Analytical capabilities give companies insight into their patterns of usage that enable them to improve efficiency continuingly.

As more organisations implement multi-cloud and hybrid infrastructures, it is too easy for costs to run out of control. The new breed of tools and management platforms, however, means they can fully optimise their entire estate and be fully capable of embracing the data-driven future of edge computing.

Picture of Matt Nash
Matt Nash
Cloud Product Manager at Pulsant

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