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Cloud Cost Control Is Cloud Cost Savings!

Thought-Leadership by Jurjen Verbeek
on September 8, 2016

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Déjà vu – the feeling I get when I talk to organizations about the cloud and, in particular, the cost of using the cloud. At this stage we cannot imagine IT without thinking of the cloud. New solutions, offerings, terms and trends appear daily since the cloud first became publically available. Much has been written and said about the advantages of the cloud: speed, scale, economics, opex versus capex etc., but methods for cost control itself is much more in demand as we move from cloud being a luxury item to the cloud being an essential utility in today’s day-to-day IT.

Cost transparency is the cloud’s new frontier.

Discussions around the cloud have changed significantly over the last two years alone. Where initially the discussions were about privacy and security or what workloads to start with in the cloud, the discussions now are around how to monitor and control resource consumption of cloud workloads. Traditionally, you would know the cost of the software you use – if you needed a database or mail server you would purchase the hardware and the required licenses, obtain quotes and study the sometimes complex rules, terms & conditions of these products. But in the end you would know what the product costs; therefore, a budget or forecast of your cost could be made quite reasonably.

The cost models applied by the biggest cloud providers are great for many organizations, as most services are on a pay-as-you-go basis. In a way these vendors finance your usage and the user gets invoiced in arrears. Some vendors reward organizations with discounts that commit upfront, AWS Reserved Instance or Microsoft Compute Pre Purchase are some examples where you get a reward to commit to a certain service for a longer period of time. Again you know what it will cost upfront if you use these offerings, the only con is that you pay upfront, which shouldn’t be an issue if you do your due diligence and budget accordingly.

Why knowing where resources are being allocated is the fundamental issue to justifying a cloud investment.

Recent experience shows many organizations start using the cloud and then see its use increase rapidly because of its ease of use. However, when the invoice arrives a reality check happens, especially if you’re unpleasantly surprised by the invoice. On many occasions the costs are higher than anticipated, budgeted, or forecasted. Apart from the practical side of processing these invoices, no P.O. number, unclear who uses the services and therefore difficult to check if the cost applied are correct it highlights another issue – cost control.

Without monitoring cloud usage and associated costs, there’s a big chance that the customer will pay for services not fully utilized or paying too much for these services, which then presents the misperception of the cloud not doing its job. I visited a customer recently where we analyzed the costs and found that a specific service was costing three times the amount than anticipated. Researching this price issue showed that an error in a much used script caused the issue, a much larger instance was provisioned than was required, which was easily corrected.

This is where we start discussing:

  • Financial governance of your cloud cost.

  • How to create insights on what you’re using, i.e. by applying naming conventions.

  • Access control, who is authorized to spend in the cloud?

  • Self-service IT for the business

  • Accurate budget and internal chargeback quotes.

Another scenario – What would it cost you if a disgruntled employee leaves the company but still has access to your cloud resources? They could switch on high cost services or even sabotage your cloud. If you have controls and alerts in place you can spot these very quickly, but without alerts it could be many weeks before a red flag is raised, which is reason enough to start thinking about cloud spending insights.

Cloud technology gives me Déjà Vu.

So why the Déjà vu at the start of my blog? I like to compare it to the situation of about 10-12 years ago when VMware was first introduced. We all went through virtualization assessments as we are now going through cloud assessments. Many companies offered workshops on virtualization as they now do with cloud workshops, many fast packs, quick starts, POCs are offered in the cloud as they were then for virtualization. Maybe you remember, it will identify candidates to be virtualized, versus: identify candidates to move to the cloud? It’s was a great new technology, like the cloud. Then there seemed to be little-to-no governance on what was happening 0n your virtualization platform. Anybody with access could spin up a VM with little or no governance. As a result, many of the predicted cost savings didn’t materialize. Instead, more host servers & extra storage was purchased to facilitate the growth. This appears to be a similar trend to the cloud – it will grow with you alongside the invoices if you do not implement intelligent controls based on trend analytics.

My belief is that you need a tool that is holistic about the cloud, that will provide you insights into your IT spending, and help you make decisions about which cloud provider to use. There are several tools available in the market which can help you with these key points, but none which match the comprehensive capabilities of PyraCloud. I joined SoftwareONE recently because I strongly believe that this in-house developed platform, which has the capability to monetize cloud cost control, is a requirement for any cloud customer.

PyraCloud will allow you to analyze and allocate cloud resources to the departments that need it the most based on a monthly trend analysis. It will allow you to effectively charge back to key stakeholders who in turn are able to forecast their cloud budget based on the same monthly trend analysis. It will warn you of any irregularities, should an ex-employee go rogue and provision expensive services. 

Interested in learning how PyraCloud helped one of our customer’s better control and monetize their cloud consumption? Then click the banner below and fill out the form to receive a FREE case study!

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Topics: Cloud and BYOD

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