As multi-cloud strategies take hold and more organizations shift workloads and applications to the cloud, it can be challenging to keep track of resource usage that can result in “surprise” cloud bills and end up being costly for the business. In fact, Gartner predicts that 60% of cloud leaders will encounter public cloud cost overruns.
Today, there is increasing awareness of cloud cost implications in the long-term, as usage can negatively impact budgets and to the total cost of revenue. As organizations prepare for another potential period of economic downturn, it will be important to have a cloud cost management strategy in place to help optimize overall spend, utilization of services, and increase profit margins.
Understanding Your Environment
Organizations are trying to move fast to the cloud; however, without understanding how resources are consumed by different teams, organizations will be surprised by their cloud bill at the end of the month. When it comes to managing cloud cost, it’s important to have a comprehensive understanding of the cloud environment. You can’t manage what you can’t see, so the first step is to gain visibility into all the cloud resources in use across the organization. Understanding your data backup and recovery process is also critical so that you aren’t backing up data without first knowing why backup is needed and using storage space needlessly.
Sharing Responsibility & Shifting Education Left
The cost of cloud impacts the bottom line and therefore, cloud cost management cannot be the job of the CIO alone. It’s important to create a culture or framework where managing cloud costs is a shared responsibility among business, product, and engineering teams, and where it’s a consideration throughout the software development process and in IT operations.
In order to do just this, it’s important to shift education left. Like many DevOps principles, “shift-left” once had a specific meaning that has become more generalized over time. At its core, the idea of shifting left is to be proactive when it comes to cost management in all management and operational processes. It means empowering developers and making operational considerations a key part of application development.
Change management must be connected in the context of cost. If organizations educate and empower developers to understand the impact of cloud cost as software is written, they will reap the benefits of building more cost effective software that improves operational visibility and control. Tools such as VMware CloudHealth, can help developers gain visibility into cost and operational implications of cloud options for applications, while also enabling platform and application teams to optimize cloud spending and streamline operations.
Creating the Right Governance Framework
Managing cloud spend starts with creating a proper governance framework that sets up guidelines and guardrails for efficient cloud operations. A governance framework ensures that users are properly deploying resources with notifications of approval or denial.
In addition, it’s critical to establish standards for tagging all cloud assets. Without proper tagging, it’s nearly impossible to know which assets belong to which teams and applications, or what’s causing fluctuations in costs. With good tagging hygiene established, organizations can group assets in a context that’s meaningful to the key constituents in the organization.
Cloud cost management and continuous governance are foundational to a company’s digital transformation and should be prioritized in every cloud journey. Successful cloud cost management starts with building a framework that balances the need for innovation while reducing cost. By starting with visibility into environments, building cost awareness into software processes and leveraging optimization tools, organizations can continuously monitor and improve the efficiency and performance of the cloud environment—and align that success to the company’s business goals.
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