Cloud Spend Automation: How to Optimize Cloud Spend in a Multi-Cloud World

Industry studies show that enterprises waste up to 35 percent of their public cloud spend. Cloud spend automation can help stem this hemorrhage.

Affordability comes only second to agility on the list of reasons for moving to the cloud. But even with the prevailing pay-as-you-go model, you’re likely spending more than you should. Enterprises love the agility they get with the software as a service model availed by cloud service providers. It allows them to avoid the long, expensive process of buying, installing, and testing IT systems before production. But this doesn’t mean the cloud is cheap, particularly if your cloud workloads run largely unchecked.

Why You Need Cloud Spend Automation

Lack of visibility

Do you have visibility into all the cloud services you’re using? Do you know how much these services cost you, and what you are using them for? It’s important to have this information at hand.

Getting a top-down view of your public cloud environment can be difficult. You compound the issue as the number of cloud services you’re using expands both in size and complexity. Cloud providers will tell you how much their cloud services are costing you every month. However, they won’t give you a breakdown based on workloads, applications, and costs centers. This makes it hard to determine whether you’ve configured your workloads in a way that gives you the best possible return.

Shadow IT

It’s easy to assume that it’s only the IT department that consumes cloud services. This isn’t always the case. Other departments may also be subscribing to cloud services that you’re not aware of. Unfortunately, your cloud provider will let anyone with a credit card set up a cloud server in seconds. This can contribute to the disaggregation of IT in your organization. As a result, cloud usage can go largely unchecked.

This is shadow IT. Departments can use cloud services unchecked and even leave them active and idle as they continue to rack up charges. Implementing cloud cost governance and using management tools can provide visibility into unused and rarely used cloud resources.

Complicated Pricing Models

Knowing the actual costs of your cloud operations can be difficult because cloud providers usually have sophisticated pricing models. They base their pricing on usage dimensions and update the prices regularly.

Consequently, what might have been an economical pricing tier yesterday isn’t the best deal today. The best way to manage costs is to stay on top of these fluctuating prices, tiers, and plans. But this requires real-time monitoring that your IT staff cannot deliver.

Cloud Spend Automation

Most companies sign long-term agreements with their cloud service providers in a bid to get volume discounts. As a result, they don’t bother to match specific applications to the best service or service provider. You need to get away from this kind of mindset. Instead, adopt a dynamic model so you can capitalize on the best price for each workload.

You should evolve your processes and best practices to mirror the real-time, continually changing nature of provider pricing of cloud workloads. The best way to go about this is to adopt automation. To do this, you’ll need cloud management platforms (CMPs) independent of your cloud service provider. Such a tool will give you visibility into the entire hybrid cloud setup.

A CMP will work with private and public clouds, so you can see what exactly runs where at any one time. These tools use analytics to compare pricing across cloud service providers and tiers so you can adjust your workloads accordingly. They can identify services and resources that are idle, too. They can also weed out underused services your company may have procured outside the IT department and continues to pay for.

To deal with shadow IT, let engineering teams use the cloud services they need. However, you should centralize cloud governance through IT teams. Do this for all cloud services across all departments in your organization.

Cloud spend automation can take the headache of managing cloud costs off the shoulders of your IT team.

Establish Where to Run Workloads

Here are some rules of thumb for running different types of workloads.

Static workloads

These types of workloads are very predictable and run at the lowest cost in your private cloud. It’s easy to forecast the number of resources that static workloads consume. You can plan so you’re incrementally adding more resources to the established infrastructure to accommodate these workloads.

Dynamic Workloads

Unlike static workloads, these are unpredictable workloads. They run best in a public cloud that you can turn on and off quickly.

Semi-Dynamic Workloads

These workloads can run in either a public or private cloud. The decision on where to run them depends on the availability and robustness of the data centers and resources you have. If you’re going to need significant on-premises buildout to accommodate the new workloads, it’s much cheaper and simpler to turn to the public cloud.

Cloud Management Platform Comparison

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Features & Competitive Comparison