The Cloud - How much is inefficiency costing your business right now?

The Cloud – How much is inefficiency costing your business right now?

Firstly, I’ll make it clear that I’m not going to be able to provide you with an answer to this question. But you are probably spending far more money on your Cloud investment at the moment than you need to. It’s a scary thought, as I’m sure you are realising lots of business benefit from your use of the Cloud. 

Cloud service providers focus their attention on advertising the potential cost-savings that IT departments can make by moving to the Cloud.  What they don’t tell you is that, if you don’t properly manage your use of the Cloud, the costs can spiral out of control. 

There are a number of different ways that you can find yourself incurring unplanned costs when you are running a Cloud Computing environment. Once you understand where the potential unplanned costs can come from, it is possible to put in place strategies to control these costs.  

Understanding of the Cloud product set 

Cloud Computing isn’t a one size fits all solution.  There are lots of different products available from numerous providers, across SaaS, PaaS and IaaS solutions.  Understanding what products are available and which meet your requirements is an essential first step to your adoption of a Cloud strategy.   

The pricing of these products may vary based on the service on offer. Some products (typically SaaS) may be licensed based, with the costs incurred either upfront or as a retrospective true-up. Other products (typically IaaS and PaaS) will be resource based, as either an upfront subscription or pay-as-you-go model. 

The sorts of things that you can do to help control your Cloud Computing costs include: 

  1. Tracking your spend – Use whatever tools are available to you to understand, what you have purchased, what you have used, what it is being used for, and what you actually need.
  2. Ensure your resources are allocated to the right tier of product – Having the wrong resource in an incorrect product tier can be expensive, you need to make sure that you aren’t paying for a product that you don’t need.
  3. Review the latest product sets – It’s essential that someone in the organisation is tasked with understanding the new products, and ensure the right ones are being used. It is possible to realise 10-20% cost savings by using the correct products.
  4. Identify lower cost alternatives – The Cloud is continually evolving, with alternative lower costs products continually appearing. It’s often worth looking at the products being used and whether there is a better alternative.
  5. Negotiate the best price – Don’t be afraid to negotiate on the price of your Cloud Computing. Understanding what your real demand is and how it will grow, allows you to negotiate the best deal.
  6. Look at using reserved instances – One of the best ways to save costs, where you are able to predict your potential capacity requirements, is to use reserved instances.  Basically, you pay a certain amount upfront to reserve capacity. This has the ability to reduce costs by 20-75%. 
Management of your Cloud environment 

The management of your Cloud environment is one of the key areas where unexpected costs can be incurred. In a poorly managed environment, the over- or under- provisioning of resources can quickly lead to increased costs.  It is essential that you implement an Environment Management function, that is responsible for ensuring that all your Cloud environments are managed in a way that maximises usage and minimises wastage. 

There are a variety of tasks that can be carried out to help manage the Cloud environment and control the costs: 

  1. Shutdown weekend development resources – Resources can still incur costs when they are not being used, particularly development servers that are not used at weekends.  Spinning these servers down when not used can realise savings of up to 20%.
  2. Only use resources when required – It is often the case that some environments are only used for a short period of time, only spinning them up when required can realise significant cost savings.
  3. Remove unused resources – There should be a regular review of all provisioned environments and decommission any that are no longer required.
  4. Correctly configure services – You need to make sure that your services are correctly sized and configured to meet your exact capacity requirements. As demands change you can easily flex your services to meet requirements. 

You also need to ensure that the skills of your in-house team are Cloud optimised. Different skills are required to manage a Cloud environment than an on-premise solution. Your team need to rapidly adapt to these new ways of working for your Cloud migration to be a success. 

Through all of this, it is important that you don’t just view the Cloud in terms of managing the cost.  It must be viewed as a business enabler, and therefore a significant benefit.   

If you would like to find out how iCore can help you reduce your costs in the Cloud then contact us on 0207 868 2405.