How to be More Efficient at Managing Cloud Spend

manage cloud spend
An Idealistic vision of the cloud includes simplicity, increased speed, and lower costs. This vision is difficult to actualize though. Many enterprises have become overwhelmed with managing a cloud on their own. Thus, managed services and a variety of cloud solutions have been created to simplify cloud management. Cloud cost optimization has been at the center of many of these tools.

We recently chatted with Brian Johnson, CEO of DivvyCloud, to learn more about cloud costs. DivvyCloud is a policy-driven automation of cloud security and compliance company. We also discussed container security with Brian last month, which you can view here.

Of cloud costs, Brian stated:

It has become much easier to purchase new software or services, which means it’s even easier for spending to increase. Not effectively managing those expenditures can spin quickly into headache #1 – overspending. IT Directors live with a general fear that a developer will provision an expensive service that will create a $30,000 bill in a week and that they’ll only find out about it when it is too late.

How can executives balance cost and output expectations?

Executives shouldn’t go into cloud computing with the expectation that it will save money or be less expensive.  By default, with no changes to applications or architecture cloud computing will be as expensive or more expensive than traditional data centers. Additionally, as you shift to a self-service model, the opportunity for cost overruns increases.

Executives must understand that “moving to the cloud” must include a clear strategy for how you will modernize architecture and applications to take advantage of the efficiencies that cloud technology offers, a commitment to consolidating and shutting down existing data centers and fixed infrastructure, and a reimagining of how to run operations with a focus on automation.  These changes also allow customers to embrace the output expectations.  If companies can embrace self-service access to cloud technology, this can greatly increase the efficiency and creativity of engineers and developers.  This has real and substantial value to companies in terms of driving corporate innovation and thus profitability.

What concerns do you have for the future of cloud costs?

The biggest challenge for cloud costs is for companies that don’t put in the people, processes, and systems necessary to govern the cloud while embracing self-service.  Without these three elements in place, companies will continually be chasing cost overruns and inefficiencies.

Does high cloud spend give tech giants major long-term competitive advantages over smaller businesses that can’t afford to match it?

The efficiency of cloud spend is more important than the size of cloud spend.  The beautiful thing about cloud technology is that your spend can ramp with your consumption, and thus can be directly linked to the success of your product.  It is far more important for spend to be highly efficient, which can be achieved by any size organization.  In many ways, cloud levels the playing field by removing the need for companies to make massive upfront capital investments.  In this recent past, large companies had an advantage through their access to capital.

Where are organizations lacking visibility to prepare for future needs accurately?

The focus should be on architecting highly scalable architectures that take advantage of self-contained cloud services.  This approach allows companies to future-proof their development, fail inexpensively, respond dynamically to changing conditions, and scale rapidly with success.

If you want more info on rising cloud costs, be sure to check out our interview with Matthew Scott from Cloudability.