LET'S STATE THE OBVIOUS:
If your organization is highly invested in the cloud, it’s not uncommon for your cloud bill to be one of your biggest business expenses, and also one of the hardest to manage. But, it doesn’t have to be that way.
If you have the right governance principles in place, it will be easier to manage your cloud cost and resources.
I’ve had the opportunity, through multiple client engagements, to see how companies are utilizing their cloud services and a first-hand view of how many organizations would benefit from a structured approach to cloud computing cost savings. Some corrections are straightforward, and some require rethinking about how cloud services are implemented. With that in mind, I wanted to walk you through everything you need to know about managing, monitoring, and reducing the cost of cloud computing services.
It’s a different world from on-premise.
Cloud computing offers major financial and operational benefits for companies. However, it can also introduce complexity and cost that, if not governed properly, can endanger the health of the business. Enterprises that monitor and optimize their cloud computing costs will see a positive, immediate, and long-term impact for their organizations. As your platforms are migrated to the cloud, many of the costs will move from the one-fee capital expenditure structure (resources + on-premise hardware costs) to operational expenditures (e.g., paying for computing power).
And the biggest difference isn’t necessarily how it’s billed, it’s all about how it’s framed within the organization.
Cloud budgeting and finances are very different from on-premise. How leaders frame the costs of on-premise vs. cloud, such as capital expenditures (CapEx) vs. operational expenditures (OpEx), often ends up driving the conversations around how the cloud should be built and utilized. Educating leadership on the differences is really key here, because trying to build everything out as close to a CapEx model as possible usually leads to a poor cloud design and losing out on a lot of the benefits of cloud such as on-demand scaling.
Leadership needs to understand the different kinds of budgeting and tax implications while planning for the future.
Managing hardware, networks, and storage is a significant undertaking that often requires an entire department to manage. Scaling up and scaling down is generally very slow because building new servers and decommissioning old ones requires significant hours to complete. Resource-for-resource, on-premise tends to be cheaper in the long-term, but efficient use is more difficult to achieve across an entire organization. And that’s where cloud computing comes in.
Cloud cost management and optimization help companies save on their cloud bill by reducing waste and alerting users of lowered demand or automatically scaling usage to optimal rates. By budgeting cloud costs, cloud cost management solutions often provide reporting features to outline waste and redundancies—which can increase the efficiency of usage, save on hidden costs, decrease TCO, and help businesses go-to-market faster.
I would like to give you a rundown of how you can manage your IT costs effectively. This list isn’t meant to be exhaustive, but if you pay close attention, you’ll be able to do everything you need at a lower cost.
Let’s start with how cloud services are billed. Then I’ll give you some insight into the process of how Prime TSR helps our clients reduce cloud costs.