The Coronavirus pandemic and the resultant lockdown has left enterprises with no choice but to quickly embrace Cloud-based solutions. According to IDG’s 2020 Cloud Computing Survey, Cloud spending now represents roughly one-third of all IT spend, with majority of the enterprises planning to use Cloud services for more than half of their IT infrastructure and applications.
The pandemic has also compelled organizations to move to the remote working model overnight, leaving them with little time to plan their Cloud strategy and the proportion of “spends” towards the Cloud from the overall IT budget.
The unpreparedness has left a lot to be desired for enterprises. The enterprises have not been fully equipped with the understanding of Cloud credits, consumption of Cloud services, monitoring of Cloud services etc. Most of the enterprises had not formulated an organization wide policy to govern Cloud usage. Each of these aspects impact the RoI from the Cloud subscriptions and eventually the organization does not generate the desired value from its Cloud investments.
I would recommend a few measures as below to enable enterprises to not only optimize Cloud investments and bring Cloud costs under control but also ensure significant value from their Cloud investments.
Create awareness around “Cloud technology” across the organization – For an organization to optimally utilize their Cloud investments, it is extremely important that Cloud computing is understood well across the organization. To leverage the benefits of Cloud to the fullest, the teams across the organization need to be aware about how the Cloud subscriptions work. These teams include IT, technology teams, and procurement teams. For instance, the procurement team cannot forecast and buy the optimum storage on the Cloud unless it collaborates and co-ordinates seamlessly with the technology team. Such siloed approach towards Cloud can lead to mismanagement and result in loss of time, effort, money, and resources of the organization.
Cloud Consumption and Monitoring – To ensure cost-effectiveness with respect to Cloud usage, it is imperative for organizations to practice stringent ways of monitoring Cloud resources. They need to start monitoring right from the planning stage – decisions such as which Cloud services provider to opt for, how much storage and computing to buy and when exactly to buy the Cloud resources. Further, the consumption of credits across the Cloud should also be keenly monitored to ensure that they are used prudently and hence, the return on the investments with respect to Cloud can be maximized.
These monitoring tools may also enable organizations to set pre-defined alerts and view periodic reports to control and ensure optimum consumption of credits and use their IT budgets most effectively.
Better Negotiation with Cloud Service Providers – A great hack with managing Cloud costs is to understand if the current licenses and annual maintenance contracts with existing OEMs can be utilized. For instance, if you wish to move your applications to Oracle Cloud or Microsoft Cloud, you can negotiate and cut a much smarter and cost-effective deal by optimizing your existing licenses and spends. When applied across the enterprise IT landscape, this can result in huge cost savings not only across procurement of Cloud subscriptions but also in terms of efforts and time spent by the IT teams to ensure seamless transformation to Cloud.
Be Aware of Auto Renewal and Scaling in & out of the Cloud – The IT procurement team should ensure that they set alerts to stay updated about the renewals and hence, prevent themselves from falling into the auto-renewal trap. They should do a periodic assessment of the Cloud subscription and give up what is not required. They must ensure that if the utility of the Cloud subscription is over before the renewal is due, they should inform the Cloud Service Provider well in advance and ensure that the organization doesn’t get billed for the subsequent year for unrequired Cloud credits. The IT teams must also understand the nature of applications and usage. If an application doesn’t run 24*7*365 or if its usage is cyclical in nature, the scaling in and scaling out needs to be managed in finer detail This ensures that the consumption of Cloud credits and the allied cost is proportional to the well-managed usage which leads to immense cost savings at the organizational level.