August 29, 2021
The pandemic’s impact on IT spending has been massive and cloud usage has spiked since companies had to find a way to support a fully remote workforce. Now, interest in cloud cost optimization has risen following the highs of the COVID-19 pandemic.
This blog will explore ways in which companies should handle rising cloud costs:
The reason cloud costs spiral out of control is often due to a lack of governance. Imagine the following common scenario: your engineering team has little understanding of cost efficiency and builds applications without costs in mind and spends more than they need to on the cloud.
As a result, your finance team needs to keep up with the engineers but may struggle to understand costs. Then business management may feel like they don’t have enough visibility into company spending including costs.
Hence, establishing a FinOps strategy makes sense. FinOps is a fairly new model for technology cost governance. In terms of the cloud, FinOps is “the practice of bringing financial accountability to the variable spend model of the cloud.”
Accountability is key here. While the best practices and tools vary, ultimately FinOps ensures that engineers take ownership of their individual cloud costs. Typically, you’d also want an entirely separate individual or team that can be tasked with finding different optimization opportunities and connect with public cloud vendors to haggle the best rates.
A multi-cloud environment was already becoming the norm before the COVID-19 pandemic erupted. According to the IDC (International Data Corporation), 64% of cloud adoptions were multi-cloud as of 2021 Q1.
One of the reasons why companies are opting for a multi-cloud approach is to capture greater cost savings and optimization efforts on top of improved disaster recovery and business continuity.
Evidently, the COVID-19 pandemic has caused CIOs and other IT leaders to re-evaluate any preexisting IT priorities and to think more about minimizing operational costs.
A recent IDG (International Data Group) survey revealed that the number one concern for CIOS post COVID-19 spending was cost control and management.
As a result, the move toward multi-cloud has its benefits, especially when you’re trying to balance costs better by shifting key workloads and services to a new cloud provider.
A hybrid model also works in cases where you can choose the most appropriate “platform” (on premises vs private cloud) to run your workloads.
A huge concern among companies is their lack of in-depth understanding of how their teams use cloud resources. A cloud cost management platform helps breakdown cloud usage and costs in a way that makes it easy to understand so that team leaders can make changes to optimize their cloud infrastructure.
A cloud cost management platform can also:
Understanding cloud costs can oftentimes feel like a full-time job. A cloud cost management platform helps translate complex cost insights into clear, applicable data that empowers your engineering or DevOps teams to be successful in their optimization efforts.
The cloud already provides cost saving benefits and the added benefit of being able to scale your infrastructure as you wish. Nevertheless, cost-related optimization efforts require real-time data to make quick decisions.
The COVID-19 has pushed cloud usage higher than what the majority of businesses initially planned. The impact on unmanaged cloud costs comes as no surprise.
As mentioned, the rise of FinOps has resulted from businesses struggling to keep cloud costs down. But establishing a FinOps strategy is easier said than done. FinOps involves breaking down barriers between the development, engineering, and finance teams.
This may involve a major shift in work culture especially for established businesses who already have their own ways of working. FinOps would require changing the way these teams essentially communicate, which isn’t an easy feat.
Fortunately, new tools are continuously rolling out to make the lives of developers and engineers easier, whether that means eliminating cloud waste, identifying cost saving opportunities, optimizing performance, or negotiating discounts with cloud vendors.