In 2018, an Adobe software development team incurred $80,000 a day in unplanned cloud costs—with a final bill that exceeded half a million dollars.
How can IT managers ensure their budgets for cloud aren’t overspent?
SEE: Top five on-premises cloud storage options (free PDF) (TechRepublic)
1. Manage your assets
Significant cloud spend is coming from end user departments because it’s easy to engage cloud resources without even notifying IT. Unfortunately, this cloud spending ultimately accumulates in corporate-wide IT budgets. At some point, the CEO and the board may begin to get concerned about overall IT spending.
IT will never eliminate shadow IT spending by users—but, what it can do is implement a corporate-wide IT asset management system that can immediately detect a new service when it comes online. This way, services that are engaged surreptitiously are immediately visible—and so are their costs.
2. Get rid of dead wood
Part of the asset management process is ensuring that you’re getting your money’s worth from your IT investments. If an IT asset like a cloud service is underutilized, use it or de-implement it.
3. Don’t store worthless data
Many organizations initially stored all incoming data. To avoid clutter in their own internal data centers, they sent excess, unused data out to the cloud. If your company is one of these organizations, it’s time to evaluate what you have thrown out to the cloud to determine if it’s worth saving. If not, get rid of it and reduce your cloud spend.
4. Do an apples-to-apples comparison of cloud vs. on-prem IT costs
The cost value of cloud seems cheaper than on-prem data center processing and storage because you don’t have to buy equipment and beef up internal IT infrastructure. However, you do have to have sufficient bandwidth to access and download/upload data and processing from the cloud, which can be costly.
There are also “fine print” contractual high costs with cloud providers when usage exceeds normal limits. When you do cloud-on-prem cost comparisons, be sure to look at your high peak demands for processing and storage. See if these can be accommodated into normal cloud cost formulas so you don’t get surprised by premium costs.
SEE: IT budgeting: How to do it right (free PDF) (TechRepublic)
5. Get finance involved
Finance is extremely adept at reading intricate cost formulas and helping to extrapolate projected costs when you are performing cloud ROI cost modeling. On the other hand, IT is not good at this. It is to your advantage to engage finance’s help in projecting your cloud costs.
6. Fine-tune your IT infrastructure
If all you’re doing is migrating apps and systems to the cloud, you’re not likely to achieve cloud cost savings. If you’re designing apps that straddle multiple cloud and on-prem resources, costs won’t be efficient, either. The solution is restructuring your systems and apps so they economize all of the resources they use—whether resources are on-prem or in the cloud.
A final word
In 2018, Gartner estimated that over 80% of organizations would exceed their IaaS cloud costs. Likely, other cloud service costs will follow suit.
Exceeding cloud budgets is a problem to avoid.
This makes it imperative for IT to work hand-in-hand with finance or an outside consultant to ensure that cost models and projections for cloud resources are realistic so you can avoid cost overruns that could adversely impact the funding of other IT projects.