Cloud Cost Management Essentials: Expectation vs. Reality
As the streets of the cloud computing world are rife with myths and misconceptions, CIOs, CTOs, and CFOs continue to foster unrealistic objectives for saving cloud costs and hence thier cloud cost management strategy. That’s when the fine line between expectation and reality gets blurry.
One of the key findings of Gartner’s research on how to manage and optimize costs of Public Cloud IaaS and PaaS states:
“Cloud cost management is not just an operational concern. To be successful, it requires a tight collaboration among the disciplines of governance, architecture, operations, product management, finance and application development.”
However, it is easier said than done. Without a proper cloud strategy in place, understanding and managing cloud expenses can be one of the most challenging puzzles for cloud-first organizations. This conundrum arises when IT leaders and managers mix up cloud costs with business value, thinking that cost-cutting will drive greater ROI. Here’s a quick reality check; “Cost” and “Value” are two different tenets of a cloud strategy. For a broader business impact and extensive cloud benefits, your strategy should be tied to long-term business goals and not just focus on cost reduction.
It is time to burst the expectation bubbles that are unfeasible and far-fetched from the stark reality of cloud cost management.
Let us take a look at the three most common (over) expectations business stakeholders have from cloud or cloud providers when it comes to managing costs:
Moving to cloud will save costs instantly and automatically.
Sure, cloud computing, especially with Azure, is cost-effective and budget-friendly. But, expecting that your IT costs will go down right after you migrate to Azure is unreasonable.
Such expectations usually stem from the misunderstanding that cloud magically starts saving money and guarantees cost reduction right away.
Cloud cost management is not a one-time sprint; it is a continuous marathon.
Controlling cost overruns is not a one-time, set-and-forget process. Transitioning to cloud also does not give you instant savings automatically. Effective cloud spend management requires continuous planning, tracking, reduction/rightsizing, and optimization of resources you purchase.
So, if you want to move the cost needle toward the savings range, you need to understand your cloud consumption model carefully and create budget forecasts accordingly.
Leveraging cloud for everything will bring in more cost benefits.
Moving every workload and running all your applications (both modern and legacy) on, expecting that it will drive higher cost savings, is a risky move to make.
Cloud is not meant for all use cases and workloads.
Taking the hybrid approach provides better control over cloud costs.
Cloud is cost-effective for highly unpredictable applications, variable workloads, and self-service provisioning of resources. On the other hand, running legacy or traditional applications on premise may prove more beneficial than moving them to cloud.
Therefore, deploying a hybrid cloud model (such as Azure hybrid cloud) gives you an edge to extend your computing and processing capabilities.
If you want your IT team to drive cost-efficiency and deliver upon the set expectations, segment your cloud consumption into use-cases and business KPIs. An in-depth analysis of cost vs. business benefits will help you make informed decisions on which applications are worth migrating to cloud and what workloads need to stay on-premise.
Once migrated, cloud provider will do all the work, from monitoring costs to optimizing them.
If you expect your cloud provider or vendor to do all the heavy lifting for you once you have migrated all your applications and workloads to their cloud environment, then it’s a dangerous delusion.
Many IT leaders live with the notion that their cloud service provider will not only manage incurred costs but also help optimize monthly bills.
A cloud provider only offers you its cloud services and computing platform to develop, run, and scale your applications.
To realize tangible cost benefits and true cloud potential, you need an automated cloud cost management platform.
Do not expect your cloud to be simple and fully self-served. Cloud platforms like Azure provide an array of cost benefits, including flexible pricing models, but they don’t have any standardized billing formats or an expense management system.
Besides, most organizations lack IT expertise, resources, and bandwidth to successfully execute cloud deployments and manage the entire cloud ecosystem end-to-end. Underestimating what it will take to realize the perks of migrating to cloud stirs up unexpected cost risks.
You should harness the power of an all-in-one, automated cloud cost management platform that not only gives you in-depth visibility into your cloud consumption costs but also analyzes resource utilization patterns in real-time to provide you with cost-saving recommendations and best practices.
In simple words, cloud costs are complex, but managing them doesn’t have to be.
Holding on to overambitious expectations and misconceptions about cloud costs can derail your perfectly aligned cloud cost strategy. When you are thinking about cloud cost management, cost optimization or cost reduction is just one dimension to contemplate. It is equally important to correlate your overarching business goal with cloud costs. Gaining comprehensive visibility into your cloud and focusing on the efficient utilization of resources running across the environment are essentially the first steps to balancing the “Cost Optimization vs. Cost Reduction” act.
Additionally, FinOps provides in-depth guidance on how to effectively manage cloud costs. It emphasizes the importance of aligning your cloud cost strategy with your overall business goals and objectives. The FinOps platform offers valuable insights and best practices to help you navigate the complexities of cloud cost management, ensuring that your cloud costs are aligned with your business priorities. With a holistic approach to cloud cost management, you can make informed decisions, maximize efficiency, and drive long-term cost savings.
However, to achieve more significant bottom-line reductions and unlock long-term cost-saving opportunities in your Azure cloud, you need a fully automated cloud cost management platform like CloudMonitor. Try it yourself for free and drive business value