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How to Effectively Manage Billing and Reduce Cloud Operations Costs

22 September, 2020

Technology

Companies across the planet have embraced cloud computing to facilitate remote work, lower operational costs, and maintain a competitive posture in a fluctuating marketplace.

Unfortunately, after a company has made the initial decision to move into the cloud and reaps the expected short-term benefit of that action, costs can begin to spiral out of control.

Why?

Well, this wasn’t such a big problem before the emergence and widespread use of:

  1. Big Data
  2. IoT (Internet of Things)
  3. Applications for Everything
  4. Work-from-Home

These forces within businesses, large and small, have contributed to utilizing more and more cloud assets, thus ballooning the cloud budgets of many organizations.

With this stark reality in mind, we address the question, “How can you effectively manage billing and reduce cloud operations costs?”

Let’s dive right in…

If it Can’t be Tracked, it Can’t be Managed

Unfortunately, the use of cloud assets has become such a ubiquitous element across all departments within a business that many times even the company’s IT guy doesn’t know what cloud assets are being used by each department. Sure, there’s the “official” cloud host to which regular data and workflow backups are sent, but there is often a raft of unsanctioned or ‘ghost’ cloud applications that are in use and being paid for each month.

Eliminate this second tier of unaccountable cloud expenditures by conducting full audit of all your company’s departments, determining the entirety of the cloud usage and spend (sanctioned and unsanctioned).

Once a cloud specialist has been engaged to make this initial cloud audit, plans must be put into motion that will bring all cloud assets under one umbrella with full tracking, control, and transparency.

Safeguards Against Cost Overruns Must Be Established

Now that the full extent of cloud spending has been uncovered and visibility has been restored across the company’s cloud assets, governance policies must be put into place.

  •      Who can authorize new cloud expenditures?
  •      Who is authorized to deploy new cloud assets?
  •      What is the process for these authorizations?
  •      What Identity and Access Management is in place?

Determine Budget Cycle – Monthly, Quarterly, Annually

How concerned are you about the ballooning of cloud costs?

Your answer to that question will often determine your cloud budget cycle.

If you want budget reset and reporting every month, you’re more likely to choose a monthly budget cycle.

Alternatively, if you want budgets to reset quarterly or annually, you’re likely less concerned with watching every penny.

Set Budget Alerts Within Your Cloud Management

Budget cycles, however, are not necessarily the best avenue for controlling costs. Budget alerts set within cloud admin control panels allow you and your IT team to be alerted to incidents such as nearing a budgeted benchmark or exceeding that budgeted spend.

Not to worry, alerts do not necessitate a stop to cloud processes when a budget is exceeded. Instead, they alert the email/text recipients to take appropriate action.

Use Best Practice Cloud Cost Optimization

Getting and keeping cloud costs under control starts in that evaluation and planning scenario. Once a company has seen the real picture of what cloud assets each department is utilizing, a plan can be developed to integrate the various cloud processes to avoid redundant process costs.

For example, there is no need for marketing and accounting to have separate document management and collaboration cloud assets. But in many organizations, such duplication has grown organically and exists.

Planning brings about cloud-spend transparency across the organization and with that transparency, it’s much easier to drive accountability in each department.

Within the planning stages, budget expectations need to be established for each department. From this point, company leaders can analyze cloud costs on a granular level and pinpoint any problem areas.

Cloud Management and Cost Control Software

Before we dive into software brands, let’s state for the record that software is near the end of our list for a reason. Companies that implement software solutions without doing the hard, initial work of doing the cloud assessments, budgeting, governance, and best practices ultimately fail in their efforts.

Why?

Because software is only as good as the data it is given and the data it can see.

Without the whole picture, cloud management software doesn’t have the visibility into your cloud use needed to execute on your stated, money-saving objective.

Having said that, here are some of the leading cloud/cloud cost management solutions in the market today. It would be wise to have a conversation with a cloud specialist before settling on any one of these software options.

  • Amazon CloudWatch
  • ParkMyCloud
  • Nutanix Beam
  • AWS Budgets
  • Turbonomic
  • Spot Cloud Analyzer
  • CenturyLink
  • Azure Cost Management
  • Cloudability
  • CloudHealth

Agile Architecture Optimization

Our last consideration in controlling cloud asset cost revolves around the cloud infrastructure itself. Agile development methodology states that optimization results from continuous iterations. A static approach to cloud budgeting assumes that the cloud infrastructure (and therefore the cost) will remain the same for the foreseeable future.

An outlook that takes agile cloud architecture into consideration allows for the fact that new iterations of cloud infrastructure may afford greater workflow/process efficiencies or infrastructure cost efficiencies, thus driving down overall cost.

What is the lesson here?

The cloud is always evolving. Don’t get tied into a specific cloud infrastructure because a more cost-effective option may be on the horizon.

Want to know more about how to manage costs in the cloud for your business? Have a talk with the PRONIX team! We’d be happy to help you run the numbers.