Cloud Costs: Great Power Brings Great Responsibility

The flexibility delivered by on-demand access to unlimited cloud resources can enable business benefits way beyond the realm of the IT department, and can create new opportunities quickly and optimally.

But with this great power comes great responsibility, and uncontrolled resource scaling can rapidly lead to spiraling costs. In fact, around 40% of enterprises surveyed by 451 Research are regularly spending more on cloud than they budgeted for, with around 10% saying they expect to be ‘significantly above budget.’ Around 27% expect this overspending to continue into the future.

Often this overspending is because the business is using cloud resources to target new opportunities, which is exactly the value of cloud. But these costs still have to be allocated, monitored and budgeted to ensure ongoing value to the business.

Sometimes runaway costs are due to mistakes or oversights caused by the huge complexity of cloud pricing options. Factor in the scale of many cloud deployments, and the challenge is ever greater. To control and optimize these costs, enterprises need to build tools into their processes and use them on an ongoing basis to optimize capacity, enhance visibility and increase accountability.

Even simple changes can make savings – for example, only 34% of enterprises are pre-paying for cloud resources today, which can bring savings of up to 50% compared with on-demand billing. Other models allow enterprises to make a monthly commitment, which can generate large savings without the need for capex or longer-term forecasts. Cloud buyers should investigate which combination of options best suits their specific requirements.

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