How to manage rising cloud costs

21 Dec How to manage rising cloud costs

Posted at 07:00h in Cloud by Simon Spencer

In this article, we’re going to go over the rising cloud costs, why cloud waste is important to consider, and how you can use optimisation to help your cloud implementation work for you by saving costs wherever possible.

Why cloud costs are increasing.

As with everything in the world, the technology industry is suffering from a massive surge in costs right now. This includes the cloud, which takes a lot of resources to make work. With that and the rise of generative AI technologies, the cloud has become pricier than at its onset.

Generative AI requires lots of resources to be utilised effectively, and so to accommodate these technologies, cloud costs need to be increased. Due to the sheer amount of cost here, it only makes sense that the cost is passed down to the end user to ensure that these costs can be covered.

Furthermore, the rise in labour costs is another huge reason why the cloud is getting more expensive. Running the cloud requires manpower to install, maintain, and keep functional. Where with an on-premise system, all that cost would be on the end user, the cloud aims to take care of everything on that end. So, when labour costs go up, the cost of service also goes up.

Another major reason that cloud costs are so high is due to the high level of ‘cloud waste’ that exists in the corporate cloud. Cloud waste is when a cloud service remains underutilised compared to what’s being paid. This results in the mass haemorrhaging of cloud resources from corporations worldwide.

This is why ensuring that your cloud implementation is optimised is vital, as it will help reduce your costs immensely by removing the extra costs associated with cloud waste.

What are the common sources of cloud waste?

Cloud waste is a massive problem, with it costing businesses approximately $26.6billion in 2021. With this, it’s important to know why cloud waste exists to know how to tackle it within your organisation — as not keeping an eye on it will accrue a massive amount of costs for your organisation.

Generally speaking, the common cloud waste causes are —

Overprovisioning: Overprovisioning is when you allocate more than what you need to your cloud implementation. You’ll be paying for whatever you allocate, meaning that any excess usage will be costly.
Purchasing for longer periods: Oftentimes, organisations will purchase a service for longer than they require, meaning that they’ll have to pay for that extra time unused.
Duplicate purchases: Sometimes, organisations will purchase the same or similar services multiple times when they don’t need to.
Not De-provisioning orphaned resources: If you fail to de-provision an account within your implementation, it will become an ‘orphan’ account and take up resources.
Not focusing on cloud maintenance and optimisation: Not looking after and optimising your cloud implementation will lead to it requiring more resources and ultimately costing more.

Cloud waste can lead to lots of issues when it comes to budgeting and planning, as it can lead to you spending more than you planned.

How to implement best practices and tools for cloud cost optimisation

Visibility

Cloud visibility is the ability to view all activity within your cloud network. This means that you can keep track of what’s being used to ensure that nothing in your system that isn’t allocated is costing you money.

This will let you fully track your cloud consumption and let you ensure that you can take further steps, such as optimisation.

Governance

Cloud governance lets you design and implement a framework of policies that lets you manage and guide your cloud systems.

Cost management is one of the five primary disciplines that make up good governance, and so by having a high level of governance, you can ensure that your cloud implementation works for you without costing you astronomically.

Optimisation

Optimisation is the key to ensuring that your cloud implementation is cost-effective, as the process ensures that your cloud implementation is efficient and effective. Without optimising your cloud systems, you’ll inevitably spend more than if your systems were correctly optimised.

Specifically, optimisation balances cloud costs and other resources with performance, meaning that you’re always getting the best bang for your buck.

There are a few different ways you optimise your cloud systems easily —

Budgeting: Budgeting will allow you to first ensure that you’ve got a set amount that you can spend, and nothing more. This will mean that the cloud will never eat into other expenditures.
Track resources: Using the aforementioned visibility, you can track your resource usage to tweak your implementation with ease.
Right-size: Right-sizing is when you modify your system allocation to be the most efficient size, meaning that you can always ensure that you’re never overspending on performance or other capabilities.

How We Can Help

The cloud is an important consideration for any organisation looking to be successful. But, with the rising costs associated with cloud computing, it’s important to ensure that you’re up to date with the information that you’ll need to know to ensure your cloud journey is a success.

If you’re looking to get started with the cloud but don’t know where to begin, reach out to us today. Our experts are here to help you get started and will give you a helping hand along the way, to ensure that you’re never overspending.