The average enterprise wastes 35% of their cloud budget. For every dollar they invest, 35¢ is wasted. But why? The cloud was thought to be a means of saving money and unlocking new revenue opportunities. So how is it costing so much?
One theory is deployment. Instead to moving to the cloud in stages, enterprises are onboarding wholesale, in one big switch over. Such a sudden change, if ill-managed, can easily overwhelm IT teams.
They end up relying on traditional data center principles rather than cloud IaaS, because they don't have the time or expertise to lay the proper groundwork for cloud adoption.
Many enterprises lack up to date policies to manage costs in the cloud. They underestimate their cloud financial waste and struggle to maintain a holistic view of an ever-expanding cloud environment.
In this article, we highlight 3 key reasons why so much of your investment is being wasted, so you can start to plug the leaks in your cloud spend.
1. Identify Orphaned Resources
No one likes being charged for instances you thought you'd closed. Yet orphaned resources are one of the leading causes of cloud waste.
This happens when you close compute resources but accidentally leave a storage resource running. Because there's no longer any application attached to this storage, you don't notice that it's left running indefinitely, ratcheting up your costs.
It's similar to installing a program on your PC. The program's install file still sits on your hard drive, taking up space, when the program is uninstalled. The difference, of course, is that you're not charged for the storage on your PC's hard drive; in the cloud, you are.
Organizations would be wise to root out orphaned resources, as, over time, they can be a real drain on resources.
2. Reduce Wasted Capacity
When migrating to the cloud, many companies assume they'll need to purchase at least the same amount of server capacity as their on-site data center provides.
This traditional way of thinking fails to recognize that 80% of companies have more server capacity on-site than they'll ever actually use. So, when moving to the cloud, businesses find themselves paying far more than they should be, for resources they'll never use.
In fact, a study in 2017 found that 75% would actually see an increase in annual spend if they transferred their data directly to the cloud.
A major benefit of using the cloud is increased flexibility, allowing the adjustment of storage capacity, up or down, based on your needs in real-time. Additionally, AWS and Azure are always releasing updates to existing products and brand new services, offering significant improvements to capacity control.
Effective use of this flexibility, and consistent evaluation and optimization of your cloud services, are critical to avoid wasting valuable resources.
3. Manage Virtual Machines Cost-effectively
Far too many companies are wasting cloud spend by leaving their virtual machines (VMs) running 24/7. This is the equivalent of leaving the air on in your holiday home all year round. While it's sometimes necessary to keep instances running, it's best practice to shutdown unused VMs after business hours.
Another cause of wasted cloud spend is incorrect region selection. The servers running VMs are based in various locations around the world, and costs vary depending on energy expenses, real estate taxes, operating costs, and so on.
Choosing the right region for your workloads often comes down to which servers will cause the least latency for users. However, keeping costs down becomes an ever greater concern as your cloud use increases.
Despite this, according to a study by RightScale, only a small minority of businesses have a system in place for closing down VMs and automatically switching regions to save wasting cloud expenditure.
You Don't Have to Waste 35% of Your Cloud Spend
Public cloud services are offered on a pay-as-you-go basis. It's critical, then, that businesses ensure they're using everything they're paying for.
While there are steps that can be taken in-house to combat cloud spend wastage, the sheer amount of work required has led many businesses to seek out cloud management specialists to handle the heavy lifting for them.
Leading cloud service expense management (CSEM) tools have features that address the issue cloud waste. Performance of the products vary, so we've written an in-depth e-book to help you choose the ideal service.
Discover how much money your organization can save with an optimized cloud.
Topics: Cloud Management Services
