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We recommend some best practices to simplify budget tracking and spending analysis to reduce waste and lower overall costs in the cloud.
When cloud computing was first introduced as a technology, cost control or lower TCO was one of its biggest selling points. Over time, as cloud adoption has witnessed huge growth, some of cloud's hidden costs have also gone up. For example, with the ease in setting up server instances, many organizations are guilty of spinning up too many server instances that never get used. If these unused resources are not de-provisioned or removed, the cost of cloud computing related costs keeps on going up. In many cases, organizations are not able to decide the right cloud option for a specific workload. This leads to unexpected results that may mean escalations in cost and performance outages. This is corroborated by a Gartner report, 'How to Identify Solutions for Managing Costs in Public Cloud IaaS', where Gartner analysts estimate that as much as 70% of cloud costs are wasted.
In a multicloud world, organizations need a single management portal or a cloud visibility and monitoring service such as NTT's SimpliInsight. This helps organizations get the best out of their multicloud strategies.
Some of the benefits provided by cloud visibility and monitoring tools for reducing costs include:
Improved visibility across different clouds: Whether an organization is running specific workloads on a public cloud or virtual machines on the private cloud, by using a cloud visibility tool, they can analyze and monitor costs in a centralized location. This data can be segmented according to different business units or teams, and specific businesses can be charged back depending on their usage. You can then track this data to accurately forecast future budgets by analyzing specific department usage.
Periodic cloud assessment to optimize resource and performance: A periodic cloud assessment exercise can help organizations maximize the value of their investments made in cloud. If organizations don’t have the required skillsets internally, they make seek a third-party service provider to help them in assessing, planning, optimizing and managing the cloud infrastructure.
For example, based on the assessment exercise, organizations can assess existing cloud-based environments to understand current application workloads and their performance profiles. Based on the assessment, they can determine an optimal cloud configuration according to specific workloads. Once this is done, then the next step could be to automate the discovery of applications across physical, virtual, and cloud environments and assess dependencies and cloud suitability for each application. This helps organizations to prioritize applications for migration and efficiently build a successful roadmap to the cloud. A periodic cloud assessment plan also helps in understanding when to scale up or down to meet ongoing performance needs, so that the cloud configuration is always right-sized and right-priced for a given situation. This also helps in planning and forecasting. For example, organizations can run ‘what if’ scenarios by changing regions, pricing plans, instance types, instance families, and performance thresholds so that organizations can right-size their infrastructure based on performance targets.
Reduce wastage and maximize utilization: A cloud visibility tool helps organizations reduce wasted spend by analyzing granular usage data to compare actual performance with provisioned capacity and quickly identify assets that can be terminated for greater efficiency. Through the ability to gain granular visibility into both public and private cloud environments and by continuously monitoring cloud usage by different departments or businesses, organizations can arrive at more accurate infrastructure planning, and identify opportunities to increase efficiency and reduce spend. For example, the tool could help in identifying and consolidating idle resources. In many organizations, for usage of less than 1-5%, a cloud asset is billed for 100% usage. To reduce costs, the organization has to identify such idle instances or cloud assets, and consolidate them into fewer instances, wherever possible.
Building a culture of financial responsibility: Once cloud costs are aligned to different business units; they can be compared with actual business metrics. This can help individual departments build a culture of financial responsibility and help them consume cloud resources in a more efficient way.
In addition, automation principles that are part of a modern cloud visibility service can help organizations fire up alerts to departments that are going beyond the predicted infrastructure usage. This can help organizations in controlling costs and preventing them for going beyond budgeted usage.
As we can see, the cloud offers unlimited scalability. However, if left uncontrolled, the costs can be higher than expected or provisioned budgets. A cloud visibility tool can help to ensure that cloud costs are optimized and are always under control.