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In recent years, companies have moved many applications and IT infrastructure to the cloud to increase flexibility and accelerate innovation. As a result, global spending on public cloud
In recent years, companies have moved many applications and IT infrastructure to the cloud to increase flexibility and accelerate innovation. As a result, global spending on public cloud services will grow to $1.35 trillion by 2027, according to IDC. Despite all the benefits, the scale and speed of this shift has led to nearly three-quarters of companies exceeding their cloud budgets by 2023. This trend will intensify as people become increasingly reliant on digital services and companies use more computing power for their AI applications like ChatGPT.
Against this backdrop, organizations are under pressure to continue to innovate and grow without additional resources. A particular challenge is the increasing use of cloud services, which can lead to unexpected cost increases if not managed properly. The dynamic nature and complex pricing models of the cloud make it difficult to accurately predict expenses. In addition, the number of deployments and on-demand nature of the cloud often lead to sprawl, where unused resources run unnecessarily while new instances are being developed.
Most enterprises operate in hybrid multi-cloud environments, making it difficult to maintain end-to-end visibility, optimize costs, and minimize waste. However, prioritizing effective cloud cost management can simplify this process and free up budget to be reinvested in value-added initiatives. This will be critical as enterprises continue to invest in AI-driven analytics, which could greatly increase their cloud usage and associated costs.
IT managers are responsible for driving a strategy that encourages and empowers their teams to adapt cloud deployment to the needs of the business. To do this, they must invest in tools that provide comprehensive visibility into all cloud platforms in use. They must also be aware of the complex pricing models of different service providers so they can make better decisions about spending and budget allocation.
While the measures outlined are a good start, IT managers should also enforce effective processes to support their teams’ efforts to control cloud costs. Below are four best practices to help organizations become more financially responsible while accelerating innovation and value creation in the cloud.
Organizations should regularly analyze the usage of all cloud resources to ensure their resources are appropriately sized. IT managers must provide their teams with mechanisms to continuously monitor cloud usage so they can anticipate changing needs and allocate resources accordingly. Regular reviews are essential to ensure teams identify unused or under-used resources so the organization can reduce them if necessary. This avoids over-provisioning and ensures optimal application performance by adjusting cloud usage to actual needs.
Enterprises can leverage savings plans or reserved cloud instances from their service providers to achieve significant cost savings, especially for predictable workloads. These offerings allow enterprises to take advantage of discounted rates for their stable workloads and reduce the overall cost of their cloud footprint.
Organizations can implement auto-scaling policies to dynamically scale cloud resources according to their needs. This helps IT teams optimize the performance of their cloud applications during peak periods, such as the annual Black Friday retail sales, and reduce costs during periods of low demand without any manual overhead. Given the ongoing need to do more with less, these measures are critical.
Another cost-saving approach is to enforce tagging practices to accurately categorize cloud resources. This provides detailed insights into allocation and associated costs, allowing IT teams to track cloud costs by project, department, or other criteria. This also makes it easier for organizations to identify the biggest over-users of cloud and implement stricter policies and processes, such as automated shutdowns to eliminate waste, to make more informed decisions and better optimize cloud deployments.
Effectively managing cloud costs is critical for every business today. It maximizes the value of cloud investments, reduces wasteful spending, and improves operational performance. By following these four best practices, organizations can strategically plan their investments and leverage the full potential of the cloud to drive digital innovation and business agility.
This is a guest post by Srinivasan Panchapakesan, Corporate Vice President and Global Head – Amaze Business and Cloud Transformation Delivery at Hexaware Technologies
Source: IT Daily
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