Businesses are faced with unpredictable cloud bills. Managing cloud computing expenses is a growing concern, especially with an increasing reliance on digital infrastructure.
According to Gartner, spending on public cloud services is expected to increase by 20% by 2024, and with most organizations spending more on cloud storage than they budget, cloud costs could quickly become an unmanageable expense for many.
So how can organizations address these rising costs without compromising on the cloud services they need?
Technical Lead for UK & Ireland, ManageEngine.
Hidden cloud costs take businesses by surprise
The first step is to identify hidden cloud costs and areas where you’re overspending. Businesses have been blindsided by unexpected cloud costs with subscription models, resulting in inconsistent monthly costs. Cloud advantages such as scalable IT infrastructure can be a double-edged sword when considering costs and waste. At the same time, many of the largest providers of cloud applications and infrastructure services are raising cloud hosting and storage fees as inflation takes hold.
Additionally, many companies operating in a multi-cloud environment without a comprehensive tool that shows costs across the entire cloud platform are unable to track resources, such as a breakdown of usage level. It is easy to over-provision resources in the cloud, leading to wasted spending. Costs often exceed limits, and without full visibility, companies are unable to pinpoint the exact cause.
If businesses don’t have full visibility into their cloud usage, they’ll never know exactly where they’re spending more than they should or if they’re paying for services they didn’t know existed. It’s also much harder for organizations to experiment and innovate with the latest cloud technology if they don’t know exactly what they’re using.
Cost management and cloud optimization can help minimize expenses and maximize the value derived from cloud investments. Identifying a predictable cloud provider that can help optimize workloads is critical. Greater transparency across the cloud infrastructure is essential, as is investing in tools that can help provide much-needed visibility when monitoring costs and securing the cloud.
Taking a holistic approach to cloud management
In complex hybrid cloud environments, businesses are often unsure where excessive cloud costs are coming from. They often find they are paying for outdated resources or unnecessary storage.
With a more holistic approach, businesses have a better understanding of their requirements and the associated costs. Not only does this eliminate waste, but it also helps organizations be more strategic about their requirements. But this approach is not only concerned with reducing costs, it also tries to align cloud spending with an organization’s business goals. The goal is to strike a balance between cost efficiency and maximizing the benefits of cloud technology for the business at large.
The need for scalable and cost-effective cloud resources is unprecedented. However, businesses also need to invest in tools that help manage these resources and ensure that the cloud is cost-effective.
Understand your workloads, implement load balancing, and continually review and tune to reduce cloud costs. Cloud spending tools that support cost management across multiple cloud platforms provide businesses with a unified view of their spending and are most beneficial to them.
Companies should also look for tools that offer in-depth cost analysis and customizable reporting to identify cost drivers, spot anomalies, and track spending trends over time. Reports from native tools, for example, sometimes don’t track resource-level usage or user-level breakdown to identify who or what resource was attributed to cost overruns. Most public cloud platforms offer discounts if you pay upfront, but cost overruns and throttling often offset the discounts you receive. Instead, to take advantage of cost-saving opportunities, companies should identify and invest in tools that can set budgets and cost forecasting capabilities, help anticipate future spending, and plan proactively.
How AI can help
A Wasabi report shows that 49% of CIOs expect AI and ML adoption to create challenges for the cloud due to the substantial data usage by AI and ML.
However, AI could also be a major asset when considering cloud costs. There is potential for the technology to bring greater financial governance to the cloud, particularly through its ability to detect unexpected spikes or irregularities in cloud spending by analysing large amounts of data. AI could also play a crucial role in identifying cybersecurity threats and helping businesses keep up with the technological landscape.
Staying ahead of cloud costs
Access to scalable and cost-effective cloud resources is more important than ever for businesses.
The rise of AI and ML has driven new demand for cloud space, and research shows that IT leaders anticipate cloud costs will outpace budget allocations.
In this environment, taking a holistic approach can help businesses monitor the entire cloud landscape to quickly identify rising and unnecessary costs. Cloud spending tools, along with leveraging technologies like GenAI, will also play an important role. Businesses can also foster a culture of cost awareness, which helps keep costs under control and ensures cloud investments deliver maximum value. Ultimately, cost management of cloud resources is an ongoing process.
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