5 simple steps to prevent cloud overspend

There are several drivers that have fueled the surge in cloud usage globally. Businesses are recognizing that the cloud provides a level of flexibility that in-house environments cannot match. Cloud makes it easy to scale up and down quickly and efficiently with nearly unlimited resources. Adding capacity to an enterprise system can often take days in an on-premises data center, if there is capacity, but can be accomplished in minutes in the cloud.

As we have witnessed over this past year, with a sudden need to work from home, cloud rescued many enterprises by providing an abundance of resources quickly. It empowered millions of employees to work from home when circumstances were not conducive to work from their office. Therefore, it's not surprising to see the report from Research and Markets forecasting the global cloud computing market to reach $832.1 billion by 2025. However, with increased cloud usage comes the challenge of managing that consumption and avoiding overspend.

Reasons that lead to cloud waste and overspend

Even though cloud technologies have been around for years, many enterprises worldwide report having a lack of expertise on staff. Those unaware of the elements that contribute to cloud waste and over-spend end up with massive cloud bills -- without even recognizing or realizing it. The perception that cloud technology is inexpensive, the hurry to embrace anything and everything related to the cloud, poor cloud governance, and improper cloud migration strategies are some of the reasons that increase cloud overspend exponentially.

Best five steps to prevent cloud overspend

Organizations need to be deeply aware of where and how they are leveraging the cloud to avoid cloud over-spend. They also need to drive efforts towards regular monitoring and optimization of cloud usage, to manage and ultimately control overspend. Here are five simple steps they can take to control overspend:

1. Learn about cloud technology: A basic lack of understanding about cloud technologies is one of the most common reasons enterprises overshoot their planned cloud utilization bills. Frequently ill-advised decisions are made at the start of their cloud journey, and they often settle for a one-size-fits-all approach because they do not clearly define their business requirements and technology needs. According to Gartner, firms that do not have a defined plan for cloud cost management account for 70 percent of global cloud spending. In such cases, organizations can improve their cloud utilization by taking simple steps such as categorizing workloads before they are migrated to the cloud.
2.  Have a set policy for cloud usage and associated costs: Without a clear strategy for navigating their cloud journey, organizations are more likely to have misaligned priorities, leading to unnecessary consumption. At the very least, organizations should define three controls at the onset of their cloud journey to avoid overspending due to a lack of governance and oversight. These controls are:
3. Financial controls to avoid unrestricted spend.
4. Resource quota restrictions to help prevent unplanned use spikes.
5. Project management to coordinate, control, and manage the available resources.
6. Put a check on over-provisioned resources: Companies often do not worry about managing the expansion of cloud instances due to the general impression that cloud technology is cost-effective and affordable. As a result, unnecessary and/or larger than needed instances are created. These over-provisioned resources can result in astronomically high bills. Simple checks to limit available instance sizes or restrict authorized users can help prevent bill spikes caused due to over-provisioned cloud resources. 
7. Review and decommission all orphaned assets: Unattached volumes and orphaned assets continue to add cost while providing no value. Organizations end up paying for these resources, which are no longer needed, simply because the cloud resources are not reviewed regularly. Continuous and thorough assessments can help identify and remove these assets. 
8. Revisit vendor contracts periodically: Keeping a close eye on vendor contracts that control licensing and subscription services is a challenging but vital step in optimizing cloud spend. This step is especially important for businesses that deal with several vendors for various cloud services. Vendor contracts must be examined and reviewed periodically to see if there is a scope for renegotiation or revision to avoid overspend.  

Join forces with a group of professionals

Cloud is an extremely complex technology; organizations who are new to the cloud can benefit greatly by partnering with a vendor with vast experience in cloud and related technologies. The right vendor can assist you in effectively leveraging the cloud without wastage and over-spend. A well-managed cloud setup can help your business drive sustained growth as well as meet your ever-evolving business and technology needs.

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Ken Knox is the Director of Cloud Consulting at Synoptek. He is a technology visionary with over 25 years of experience in working with a broad range of emerging information technologies. Reach out to Ken at [email protected].