Cloud Cost Management | 8 Min Read
Controlling cloud spend is perplexing. Companies that do business in the cloud soon learn that understanding and containing costs are not simple tasks. Optimizing cloud spend has been the top initiative for organizations six years in a row. “The cloud makes it ridiculously easy to spend money,” says Brian Adler, senior director of cloud market strategy at Flexera. Implementing an effective Cloud Cost Management (CCM) strategy is imperative for organizations seeking to reduce wasted cloud spend.
Which Floor Plan
Some organizations build their own CCM infrastructure while others choose to purchase services through a managed service provider. On average, organizations are using 3.7 different tools to manage their cloud spend. A combination of tools will be the most likely outcome for the configuration you design. The design may follow a FinOps framework or focus more specifically on your company’s pain points. In either case the tooling choices for your infrastructure need to support the direction of your optimization model. The available alternatives each have advantages and disadvantages. The goal is to identify the configuration that best fits your company’s needs.
Build It
With a Do it Yourself (DIY) approach you start from scratch or take a free tool such as AWS Cost Explorer and customize it to your organization. From the ground up you design cost management infrastructure, choosing the features and tools that are important to your business. As you develop your CCM infrastructure you may incorporate native tooling or point-solution software to fill any gaps. It is important to remember that neither tool is sufficiently robust to address all your CCM needs.
The State of FinOps 2022 survey found that the use of home-grown cost management tooling solutions grew over the past year. The touted advantages are twofold. First, you have a greater level of control at the development phase, and second, by not spending on software or services, you put money in your pocket. Both incentives warrant closer scrutiny. A DIY approach presents the following challenges.
- Repurposing DevOps
Businesses that choose to design and build their own CCM infrastructure are primarily motivated by the perception that available options lack specific features needed by their company. Netflix is an example of a large company that chose this route. If you choose to build, be aware that DIY construction of CCM infrastructure commits your engineering team to a significant undertaking. The big question is what should your organization’s engineers be doing? Should they be creating CCM infrastructure or developing products for the business? How many engineers will be needed for the project and how much of their time will it take? Building your own tooling is a distraction from the organization’s primary mission. Changing the focus from the core strategic aspects of the business to the construction of a comprehensive CCM program weakens the organization’s ability to promote its business objectives.
- Short Supply
Interestingly, there is a growing shortage of engineers in the cloud workforce which makes it even more undesirable to engage your engineers in a nondevelopment capacity. Premium resources, in this case your engineers, should be allocated to critical business needs, not to ancillary objectives. The consumption of your engineering resources will be further exacerbated by the need to support the tools that you build.
- Security
Writing code for DIY will create security issues. Hundreds of thousands of lines of customized code not only cost money but also create potential security and governance weaknesses. Code that is not prone to security vulnerabilities takes time to write, adding to the total cost of the DIY.
- Time is Money
It takes time to build CCM tools. The new tools also need to be onboarded and continuously monitored and updated for efficacy. The passage of time results in lost savings opportunities. Each passing month without an effective CCM program in place is a month of wasted cloud spend. When evaluating the DIY option consider the speed at which a managed service provider’s CCM tools could be operational. Lost savings opportunities are another cost to the DIY option.
- The Implementation Challenge
It’s one thing to identify cost savings, it’s another to implement the infrastructure changes needed to capture those savings. Engineering may hesitate to restructure a resource if it is performing well, even when confronted with demonstrable savings. The actual execution of change is where most companies fall short. Getting engineers to take action on cost optimizations is the top challenge of cloud-based organizations. It is important to develop collaboration with the engineering side of the equation. A managed service provider can help facilitate collaboration by communicating with the key stakeholders and executing the infrastructure changes needed for cost optimization.
Buy it
Building your CCM infrastructure is one option. Buying a service by engaging a managed service provider is another. A CCM managed service provider can assess your cloud environment and recommend customized changes to optimize your firm’s cloud spend. CloudSaver goes a step further and can execute the changes for you – no one else offers that service. Their execution creates significant savings in time and personnel as well as ensuring the modifications are carried out safely and securely. Its team of experts are trained in optimizing cloud resources and has an array of software tools and talent which guarantee that your CCM journey will be guided effectively.
The hard reality is that most organizations today lack the personnel and skillsets to implement complex changes to their CCM infrastructure. Direct benefits realized from a managed service provider include the acquisition of expertise the organization does not have, increased productivity, and reduced cloud costs. In partnering with a managed service provider you will encounter the following advantages.
- Visibility
The key to optimizing cloud costs is visibility. Partnering with a managed service provider will enable you to see your infrastructure through the lens of trained cloud professionals who specialize in cost optimization. That level of visibility is not intuitive and requires a commitment to training, resource utilization and certification that the managed service provider has already attained. The result is an immediate and ongoing return on investment.
- All Day Every Day
The primary cloud providers, Amazon Web Services, Microsoft Azure, and Google Cloud Platform are continuously modifying their platforms and offering new services. A managed service provider has engineers who spend all day every day understanding these changes and adapting for maximum optimization of cloud spend. The managed service provider remains vigilant, keeping watch over the ever-changing landscape.
- Rapid Response
CCM is dynamic. A managed service provider monitors your cloud environment and provides real time reporting. This speed serves as a level of protection for your organization. You can quickly balance priorities such as cost savings, speed of development and speed to market. Wasted cloud spend can be corrected almost immediately, especially with the managed service provider’s ability to rapidly respond to detected anomalies. More than a safety net, CCM managed service providers allow organizations to stay ahead of unexpected turns in the economy.
- The Easy Button
The ease of engagement is also a significant factor. The managed service provider performs all the heavy lifting by assessing the organization’s cloud environment, providing a report with recommended changes, and then implementing the approved changes. Going forward, the managed service provider monitors the organization’s cloud activities. CloudSaver has saved businesses on average 1,500 hours per year in cost optimization activities. CloudSaver has produced cloud cost savings of up to 50% and returns on investment of up to 500% in its capacity as a managed service provider. A managed service provider’s ability to ameliorate cloud complexities is as close to an Easy Button as an organization can get.
Shadow Cloud
The cloud enables engineers to immediately deploy resources to deliver innovation with speed and flexibility, granting their organization a competitive edge in the marketplace. The focus for engineers is to build better, and faster to market, If cloud resources are not readily available through the company’s established infrastructure, users may purchase outside resources to continue their development efforts without delay. This gives rise to what is known as Shadow Cloud or Shadow IT, infrastructure that is not visible, but still creates cloud spend. The source of the cost is a mystery to finance and is not tagged to users or departments.
Shadow cloud can exist due to legitimate need but creates chaos with cloud spend. It also generates serious security concerns. A managed service provider is better equipped to detect shadow cloud so it can be brought into compliance with the company’s established cloud policies.
More Than Saving Money
Tackling cloud spend is the primary focus of a CCM program. However, a well-crafted CCM infrastructure will accomplish more than saving money. The software architecture should be designed to enable business enhancements such as more realistic forecasting, granular price allocation, and other business specific data. In short, the CCM configuration you develop should also align with the business goals of the organization.
Conclusion
When all is said and done you want a high-performance CCM configuration that optimizes your cloud spend while enhancing your cloud benefits. Getting there through DIY is frustratingly elusive. Engineering resourcing, solving security issues, and developing skillsets coupled with lost savings opportunities all support partnering with a managed service provider to construct an optimal CCM infrastructure.
Every business has unique needs when it comes to optimizing its cloud spend. A managed service provider will take those needs into account when designing your custom CCM configuration. The incentive to go “straight to smart” by leveraging your cloud experience with CloudSaver as your managed service provider is compelling. Experience reveals that it outperforms the other tooling choices.
