Short-sighted cost management strategies are to blame for spiraling cloud computing bills
3 min read
Short-sighted or reactive cost management strategies are often the root cause for rapidly increasing cloud computing costs, a new study from Boomi and Forrester Consulting suggests.
Companies were found to be slow to introduce cost remediation tactics, the study found, or lack a comprehensive understanding of their own infrastructure, which in turn has exacerbated wasteful cloud spending.
72% of global companies exceeded their cloud budgets in the last fiscal year, the study noted, pointing to a widespread epidemic of cloud overspending in the market at large.
With public cloud spending expected to reach more than $1 trillion by 2026, the report warned the “stakes are high” for reducing costs.
Despite 65% of leaders prioritizing cloud cost management and optimization (CMCO) strategies in the earlier development stages, Boomi found that most companies lack “proactive strategies” at the earlier architecture stages.
Only 6% of decision-makers cite their cloud cost strategies as being as proactive as possible, while just four-in-ten described themselves as containing costs at the “solution architecture stage.”
The traditional problems of cloud computing are a notable barrier here, with 52% of respondents suggesting that they lack a suitable strategy to deal with issues of excessive storage and 42% lacking a suitable strategy for mitigating against overconsumption of bandwidth.
“Often, unexpected costs arise from a lack of understanding when it comes to cloud capacity management and monitoring,” Guy Warren, CEO at ITRS, told ITPro.
“Following the same approach and relying on oversizing to avoid running out on capacity tends to work fine for on-premise but is exceptionally and unnecessarily wasteful in the cloud,” Warren added.
Similarly, this overprovisioning of resources can often be chalked up to a lack of proper visibility within an individual organization’s cloud architecture, as Adrian Bradley, head of cloud transformation at KPMG UK, told ITPro.
“Many businesses lack visibility into their cloud usage and costs, making it difficult to identify and manage inefficiencies. This can lead to overprovisioning, underutilized resources, and wasted spending,” Bradley said.
According to Forrester’s study, there’s more complexity to come, with a rapid increase in both cloud workloads and cloud costs predicted to take place over the next two years.
The study revealed decision-makers are expecting select groups of applications to rise at the fastest rates, with 54% looking to IT Ops, 50% looking to hybrid work, 45% looking to software creation platforms and tools, and 44% looking to digital experiences.
With inter-departmental operations compounded by other complexities, businesses face a considerable challenge in ensuring that their cloud computing activities remain manageable.
“Cloud complexity is an unfortunate inevitability as organizations continue to advance their technological infrastructure,” Mark Coates, VP EMEA at Gigamon, told ITPro.
“We have seen this in cloud computing for years now, as expanded workforces, sophisticated security measures, and hybrid cloud environments create ever more complex networks,” he added.
There are many opportunities for businesses to cut cloud spending
The report leans on integration platform solutions as a method for more effective cost mitigation and reduction, citing the enthusiasm with which surveyed respondents look to the possibilities of integration.
67% of respondents agreed that an integration platform able to connect applications, data, and people is a “game changer” in terms of improving cloud efficiencies and reducing cloud spend at the solution architecture stage.
Of the respondents already using integration platform as a service (iPaaS) solutions, 59% experienced more effective cloud cost management, 56% experienced increased data visibility, and 50% experienced improved cloud spend governance.
Regularly reviewing organizational cloud spending and services is also important, Bradley noted, owing to the often changing nature of cloud computing systems.
“It is also important to scrutinize variable charges, spend-volume clauses, and third-party spend to identify and plug cost leaks,” he said. “Cloud offers brilliant flexibility but requires regular review to ensure cost-effectiveness.”
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