Companies squander billions on overprovisioned and unused resources. A cloud management platform can help.
Almost all U.S. companies now use cloud services or applications. Shockingly, almost all of them are also wasting money in the cloud.
Several recent studies reveal that companies worldwide are squandering billions of dollars each year due to overprovisioned and underutilized resources. A new study from Forrester claims that 94 percent of companies are overspending in the cloud. Studies from various additional sources estimate that waste represents between 30 percent and 70 percent of the total global cloud spend.
Cloud expenses now rank behind only payroll among top business expenses for most companies, and analysts expect cloud costs to grow by an additional 29 percent in 2022. That trend makes improving cloud management and optimizing cloud investments key priorities for all organizations in 2022.
Centralized Management
Cloud management platforms (CMPs) help reduce waste by enabling comprehensive management of cloud resources across multiple public, private and hybrid clouds. CMP software tools give administrators insight into all cloud instances, databases and applications across all cloud platforms from a single screen.
“Enterprises around the world are moving to the cloud to lower their costs, but cloud computing has its own costs that need to be controlled,” said Bernie Hoecker, partner, Information Services Group. “A good CMP is important to a successful cloud transformation.”
Cloud adoption has increased rapidly since the pandemic because it allows organizations to support remote workers, offload capital equipment purchases and accelerate innovation, agility, and growth. However, the ease of procuring cloud resources has complicated matters. Almost anyone with an Internet connection can provision cloud infrastructure, which often leads to overprovisioned resources and unexpected costs.
Much of the waste results from a lack of oversight. One study found that only about a quarter of companies have a centralized strategy for cloud usage, while nearly half acquire cloud resources on an entirely ad hoc basis. That approach might deliver immediate benefits, but it creates a host of long-term challenges.
Less is More
The impromptu overprovisioning can become enormously wasteful. It often results in duplicated cloud instances and excess capacity that is rarely, if ever, used. Orphaned or idle cloud volumes, underutilized databases and extraneous virtual machines can quickly drive up costs. VMs and cloud instances provisioned for non-production uses such as development, staging and testing are typically only used during regular working hours. Very often, however, they are left running 24x7. With major cloud providers billing on a per-hour or per-minute basis, that idle time can eat up a huge chunk of the cloud spend.
Asset discovery features in CMPs help alleviate the need for overprovisioning. A CMP will automatically discover applications, servers, storage and services residing within both public and private cloud environments and maintain an accurate inventory on an ongoing basis. Leading solutions can also be integrated with application monitoring and management platforms via APIs.
Additionally, administrators can use the CMP dashboard to track spending and analyze usage patterns to more accurately forecast their ongoing provisioning needs. Most platforms include a cloud cost optimization module with metering, billing and accounting systems. Chargeback and showback features make it possible to apply cloud costs to the department or business unit responsible for the purchase.
Features to Look For
According to the Cloud Standards Customer Council, an end-user advocacy group, a good CMP should include these core features:
- Integration: CMPs must be able to integrate with internal and external IT systems to ensure support for multi-cloud and hybrid environments. Platforms must also support APIs, which provide unified access to data about cloud resources, configurations, user actions, costs, monitors and event logs.
- General services: Platforms should include a portal to support user self-service capabilities, a catalog of the available cloud services, and reporting and analytics features to enable insight into cloud service consumption patterns.
- Service management: CMPs should provide a view into the memory, storage and CPU capacity of all cloud services to ensure the IT team can make well-informed decisions about workload placement and capacity planning. The platform should also enable monitoring of service levels to ensure they are meeting agreed-upon performance requirements.
- Resource management: IT staff should be able to manage storage, networks, virtual machines and other cloud resources from the CMP portal. The platform should include management capabilities such as resource discovery, tagging, provisioning, automation and orchestration.
- Financial management: Leading platforms automatically track and allocate cloud computing spend to specific users or business departments. Accurate, real-time analysis and reporting are critical for understanding, anticipating and controlling cloud spend.
- Governance, policy and security: CMPs must support detailed policy enforcement and governance (for example, clearly defining what users can do). CMPs should support encryption and key management in the target cloud services.
Moving workloads into the cloud allows organizations to support remote and hybrid workforces, reduce their reliance upon expensive on-premises infrastructure and improve flexibility. Without a comprehensive management solution, however, cloud spending can quickly spiral out of control. By enabling overarching management of all cloud instances, a CMP can prevent overprovisioning and waste.
