Saturday, February 4, 2023

5 Ways CIOs can Reduce Waste in Cloud Spending

By Swapnil Mishra - November 28, 2022 4 Mins Read

With the surge in cloud computing use and cloud services consumption due to the pandemic, cloud resource management has become increasingly popular as organizations spend more money on cloud services.

Although many businesses benefit from hosting workloads in the cloud, this infrastructure model is unsustainable if businesses are unable to keep their cloud costs in check. Businesses must carefully assess the costs of their cloud services. According to Gartner report “Forecast: Public Cloud Services, Worldwide, 2020-2026, 3Q22 Update,” businesses will likely increase their global cloud spending by 20.7% to US$592 billion in the coming year as they take advantage of the technology’s scalability and flexibility.

Also Read: Ways to Achieve Efficient Multi-Cloud Connectivity

As per Flexera 2022 State of the Cloud Report, companies across the globe claim that their wasted cloud spending is increasing. Compared to 2021, respondents believed they were spending 32% more than was necessary.

Since many businesses tend to underestimate their level of waste, the actual amount of wasted spending is probably even higher than the average.

CIOs can reduce wasteful spending by following these five steps:

  1. Put an end to “unhealthy growth”

Lax oversight of cloud computing use, such as contracting for more computing than is necessary or paying for applications that have been discontinued, can increase budgetary fat.

Increases in cloud costs may be a sign of healthy development, including expansion of the user base, a rise in digital adoption, and the creation of new digital capabilities. Such growth might be thrown off course by recessions. Businesses should think about implementing financial controls and automated tracking that encourage accountability by allocating funds to the heads of different business divisions.

Also Read: Busting Three Key Fallacies About Multi-Cloud Computing

  1. Make easy fixes

The elimination of unused capacity, the introduction of auto-scaling features, and the alignment of services with the sophistication of the application, such as downgrading where possible from a “memory-optimized” service, are all “no-regret” actions that a business eager to reduce cloud costs can take. Many times, businesses can take relatively easy steps to benefit from these increases in productivity.

  1. Focus on cloud elasticity

With cloud computing, a business can spend money wisely by adjusting computing power in response to urgent needs. However, that many businesses manually control how they use cloud computing, use rigid, outdated systems, and tolerate other flaws that encourage them to buy extra cloud capacity.

The least flexible workloads should be fixed in conjunction with the engineering teams, with a focus on workloads that have been “lifted and shifted” to the cloud. Lift and shift moves should be avoided by businesses until there are strategic justifications for it, such as an exit from a data centre.

  1. Review agreements with vendors

Businesses frequently set unrealistic deadlines for moving their computing to the cloud and commit to excessive spending with their cloud provider. A company’s cloud computing typically performs worse than expected during a recession.

Companies should try to renegotiate if a provider would not extend an existing contract under the terms in effect today. For instance, the business may be able to save money by reducing its level of cloud computing flexibility. Many businesses wait until 12 to 18 months before a contract expires to begin renegotiating, which leaves little time for meaningful discussions.

  1. Sustain cloud migration

Businesses often try to cut costs by delaying the transition to cloud computing and continuing to rely on their on-premises technology. Businesses eventually use resources, utilities, leases, software licenses, and other costs associated with legacy systems for an extended period of time.

Instead of slowing migration, businesses should focus on moving the workloads with the highest value, such as those that enable automated customer support or depend on systems that will soon need to be replaced or upgraded.

The self-service aspect of the public cloud is one of its main draws. Individual users and stakeholders are frequently given access to the cloud by businesses so they can provision, deploy, monitor, and troubleshoot workloads. Although such open access may be practical, it can also result in unforeseen, unplanned, and occasionally unnecessary costs.

Some businesses only allow users with expertise in cloud cost management, like cloud architects and engineers, to access the cloud, in an effort to cut costs. These specialists can design a cloud infrastructure that offers reliable performance while keeping costs to a minimum because they are familiar with the offerings and pricing policies of providers. The IT team in charge of cloud usage should choose the best cost-control strategies for their company.

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Swapnil Mishra

Swapnil Mishra is a Business News Reporter with OnDot Media. She is a journalism graduate with 5+ years of experience in journalism and mass communication. Previously Swapnil has worked with media outlets like NewsX, MSN, and News24.

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