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Using the cloud to cut costs needs the right approach
05 October 2022
At 451 Research, we engage many organizations in conversation or via our surveys, and they almost universally say they are developing and executing initiatives relating to business transformation and modernization. Among these initiatives is a move to cloud platforms, which includes the use of native cloud technologies and methodologies, as well as multicloud and hybrid IT strategies and architectures.
Cloud-project configurations will vary widely among organizations, but an intent to transform using these platforms has become the norm. Organizations also share common objectives, such as improving their organizational agility, application performance and information security.
In our latest Voice of the Enterprise Survey results, we identified costs and cost savings as a primary driver of these undertakings, a desired outcome of transformation and a key limiting factor in the use of some of these resources. With effective planning and execution, transformation efforts can cut costs in ways that don’t require cutbacks in the usual “belt tightening” sense. Here are some examples of how transformation and modernization can create cost savings while improving the overall performance and experience of information technology:
Reducing waste and rightsizing
This is a core premise of the cloud. On-demand resources enable organizations to use only the computing resources they need, while hybrid and multicloud architectures may allow them to use lower-cost public cloud options, where appropriate, or dedicated resources when the resource demands are consistent and known.
Making effective use of cloud economics
Public cloud platforms allow organizations to optimize their environments for cost through the effective use of commitment and instance types, load-balancing tools, advanced serverless functions and other cloud-native means.
Reducing project development time
A modern cloud deployment (public or on-premises) combined with DevOps practices can empower developers to provision resources and apply governance. This reduces the time and human resources required to bring new projects to market, thereby minimizing the cost of development over time.
As energy costs increase worldwide, the move from legacy systems to more energy-efficient environments, including public cloud, will have a positive impact. A specific focus on energy efficiency in cloud projects may lead to even bigger savings.
For organizations to realize the full cost advantages of modernization and a multicloud strategy, they need to involve their planning, engineering and operations resources in every stage of their transformation. But this requires a type of expertise that tends to be expensive and difficult to acquire and retain.
The need for advanced cloud expertise, combined with the scarcity of these resources, has therefore led to a growing proportion of the organizations surveyed by 451 Research engaging external advisors. We noted this trend even among organizations that may have handled these requirements internally in the past and those that have begun their journey of modernization without help.
Of course, there is a cost to engaging advisory services as part of a cloud strategy. The cost of those services can be offset, however, when expert advice enables organizations to realize the above-mentioned efficiencies while improving their agility, performance and ability to innovate.
Read more about NTT’s Multicloud as a Service.
Liam Eagle is Research Director and Head of the Voice of the Enterprise and Voice of the Service Provider practices at S&P Global Market Intelligence.