Insights

Managing Cloud Costs

November 6, 2018, MOQdigital Marketing

Journey to the Cloud

MOQ OCTOBER (13)

Transitioning to Cloud can come with complexities that many businesses have not anticipated – including unexpected costs. These costs can come as a significant surprise, with monthly expenses leaping hundreds, if not thousands of dollars – all due to improper management and a misunderstanding of Cloud pricing structures. With Cloud computing transforming the face of IT, it is easy for businesses to ride the wave of success and digital growth. Indeed – they should be. The Cloud is fast becoming a cornerstone of success in a modern market, with deployment forecasts set to grow from 16% to over 40% by the end of 2020. Easy resource access, scalability, agility, and month-to-month costs; the Cloud makes sense. However, businesses need to make sure that they are paying for what they use and controlling their resources and pricing appropriately if they are actually to make the most out of their Cloud investment.

Unfortunately, many businesses are receiving bills that are significantly larger than anticipated – with the issue not being the price rise, but the fact that they don’t understand why the price has risen in the first place. Cloud costs escalate. Cloud costs are part of a company’s cost of goods sold, and because of this, need to be managed with the same due care as labour and marketing expenses. They are not a set and forget cost like traditional IT. It is an ongoing infrastructure that requires ongoing management. So, what is actually costing companies using the Cloud? There are a few things:

  •  Running instances that are not in use: This is the same as leaving a light on in a room that isn’t being used. Many customers will turn a Cloud service on and forget to turn it off again, incurring the costs associated with running a Cloud service 24/7.
  • Using the wrong Cloud: Many companies make the mistake of buying services that sound good, but that aren’t the right solution for their business needs. Overspending can be hard to spot in the Cloud, but an optimised service that is tailored to a specific business need and
  • Poor storage: Cloud storage is generally not expensive, but it does cost money. Those companies who are storing data longer than required, or storing unnecessary data, are increasing their Cloud costs without needing to. Well tiered storage will ensure that the right service is accessed and utilised
  • The wrong vendor: A business must make the effort of reading the fine print associated with their Cloud vendor. Many prices look the same, but one may have a dramatically lower price for a particular workload, while another will offer more relevant solutions for a company’s needs. Some vendors may even have a lock-in, trapping a business in a service that they cannot get the most out of.

There are several other reasons why a business might be incurring higher Cloud costs than necessary. Companies can address these issues to reduce their Cloud costs, but can also pursue better cost management with:

  • Autoscaling: To automatically scale resources up or down according to business needs.
  • Conduct Regular Audits: Cloud is far from set and forget. Cloud has a similar sprawl problem to that of when that server virtualisation can into the industry. Regular auditing to ensure instances running are require will help with cost waste.
  • Implement Reporting: A good Cloud management strategy includes reporting tools that help make sure that every instance is mapped back to its use, providing insights and incentives that businesses can use to reduce waste.
  • Implement Automation: A powerful and popular tool, automation can help reduce operating expenses by eliminating manual processes and streamlining IT operations.
  • Find the Right Vendor: Once a business has the right Cloud vendor, they can find the right cost management solution for their ongoing needs.
  • Make a Commitment: Many vendors offer reduced pricing when businesses commit to spend a minimum amount over a given period.

If you are unsure if you are getting the most out of your Cloud investment, or are concerned that your Journey to the Cloud will be more costly than it needs to be – contact MOQdigital today. Our experienced consultants can help tailor a solution to meet the needs of your business, and the expectations of a modern market.