Nov 06, 2018

Don’t get blindsided by the hidden costs from a public cloud provider (especially if they used to be a bookstore).

Many businesses have been there. You get all excited about making a move to the cloud. The low costs of adopting the solution in the first place lead to a lot of congratulations across the IT department.

Everybody’s into it. Life is good. Then you get your first bill…

“What the #*%$ is this?!”

You underestimated usage, got hit with a high fee for excess bandwidth consumption and charged heavily for infrastructure resource consumption during a usage spike. Your first bill greatly exceeds your budget and now you’re scrambling.

Flash forward two years: The cloud has been valuable enough to be worth the initial trouble, but your IT team is now spending half of its time making sense of billing, shuffling workloads between different environments to optimize your cost situation and getting dirty looks from the finance team (mostly from Karen) because you can’t seem to keep to your budget. You’re not alone.

Cloud cost management is emerging as a major problem in today’s cloud-first era, and organizations are searching for answers.

The Scale of Cloud Cost Problems

Just how bad is the situation around unexpected cloud costs? It’s pretty terrible. SoftwareOne just released the results of a survey asking IT leaders about their challenges with the cloud.

Top Pain Points

Unpredictable cloud costs, which was identified by 37 percent of respondents, and lack of visibility, which was highlighted by 30 percent of those polled. Companies are not only facing costs they can’t predict, but they also can’t gain transparency into the cloud they require to be able to start anticipating costs moving forward. Yeah, it’s bad.

Remember when the cloud first became popular? It felt like every study was saying that people loved the cloud because of low costs, but were hesitant to adopt because of security and data control issues. Well, the SoftwareOne study found that high costs ranked as the top concern for businesses moving to the cloud, noted by 43 percent of respondents. What’s more, actual cloud budgets are also contentious. The C-Suite, on average, perceives cloud budgets to be set at $6.3 million. IT decision-makers perceive those same budgets to be $5.05 million.

There’s a massive blind spot surrounding cloud costs, and it’s time for businesses to take control of the situation.

Managing Cloud Costs

With costs escalating, organizations must take on new tactics to stay on top of cloud expenses. InformationWeek reported that cost management is inherently challenging because of cloud complexity and difficulties in usage forecasting. To overcome these issues, business should consider monitoring spending and usage each day and ensure unused workloads are taken down immediately.

On top of all this, businesses should seriously consider the transparency offered by cloud hosting providers and work with vendors that try to simplify contracts and service level agreements. Lume stands out in this area, as we simplify billing and avoid the high costs that come with excess resource usage and spikes.

When comparing apples to apples we can typically save our customers 40% compared to other providers, something that pays off as organizations work to optimize multi-cloud environments.

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