Cloud became a non-negotiable part of the company tech stack as leaders worked to sustain operations past pandemic disruptions. It was a conduit for remote work, and helped scale resources to adjust to shifts in demand.
Now, as companies ready their 2021 budgets, the desire to optimize costs shapes decision-making, driving IT leaders closer to tools and strategies that can make cloud spend more efficient.
IT departments seek technology that allows them to schedule the availability of their cloud resources, work to make use of vendor savings programs and improve the efficiency of their existing applications in order to slim down the cloud bill — which comes due even in a pandemic.
It's an area of spend organizations want to get under control before usage grows. On average, organizations find themselves over-budget for cloud spend by 23%, with cloud spend set to grow by 47% in 2021, according to the Flexera 2020 State of Cloud Report.
Calls for insight poured in from organizations of all cloud maturity levels in terms of evaluating their options to improve cloud spend management, said Tracy Woo, senior analyst at Forrester. Across the board, companies want to know how to save money in their cloud strategy following an uptick in usage.
Tools that allow for a scheduled resource allocation are an easy starting point, Woo said.
"Things like turning off resources during off-work hours or on the weekends when services aren't being used as much: those things are actually being paid attention to," said Woo.
In speedy cloud migrations driven by the pandemic, efficient resource management might not have been top of mind, as organizations were more focused on adjusting to disruption in real time. Mistakes in cloud migration can lead to overspend by 20% to 50%, according to Gartner estimates.
Companies wanting to slim down the cloud bill are looking to identify "where resources are not being used," what applications might be idle or using over-provisioned resources, said Woo. IT leaders want to optimize their IT environment so that they're not "paying through the nose for these cloud services."
Waste often happens when migrations shift misallocated resources from on-premise into the cloud, said Ed Anderson, distinguished research VP at Gartner.
"If you had applications that were running on virtual machines that had too much capacity allocated, you move that to the cloud and now you're paying for that excess capacity, and that's waste," Anderson said. In the pandemic aftermath, "the need to reduce costs will help organizations focus on these areas of inefficiency."
Cloud cost management functionalities and tools abound. Anderson breaks them out into four categories:
- Cloud governance tools ensure employees use the cloud as authorized by cloud usage policies,
- Cloud cost management tracking tools allow IT leaders to know how much is spent and manage it,
- Cloud optimization tools ensure resources that companies pay for align with the resources they need, and
- Cloud forecasting tools predict usage and leverage prepaid options.
"Organizations that are trying to optimize their costs using cloud have to be good at all four of them," said Anderson.
IT organizations can reduce the heft of the cloud bill by moving backup data into lower-cost, longer-term archival cloud storage services, deactivating and archiving storage buckets and objects that haven't been accessed in 30 days, Forrester said in a report. Cloud management tools can help resize workload configurations accordingly.
Reserved instance (RI) purchase recommendations and savings plans from vendors can also shave spend off the cloud bill, Woo said.
Businesses that can understand their "established pattern of cloud usage" can turn to RI purchases to lock in a cheaper price, according to Woo.
