“81% of IT teams directed to reduce or halt cloud spending by C-suite”
“Organisations with little or no cloud cost optimisation plans end up overspending on cloud services by up to 70% without deriving the expected value from it”
Gartner, 2022
Big Tech under pressure from cost-conscious cloud customers (ft.com)
The cost of cloud resources has been increasing at an alarming rate for many customers who use cloud service providers such as Microsoft Azure, Amazon Web Services, or Google Cloud, and for those who use multi cloud providers then the costs for cloud usage can be eye-watering. For many, large volumes of data have been integrated into these platforms to capitalise on the huge range of services these cloud providers offer. Ranging from unparalleled data resilience to large-scale advanced analytics.
Initially, these costs may have offered cost savings from the traditional on-premises cost, but as data volumes increase, the cost savings evaporate, and cloud cost management increases with many organisations IT teams overspending on their cloud environment. The good news is there are ways and approaches to reduce cloud costs that can be built into your cloud strategy.
Where do I begin?
At Oakland, we’ve seen a lot of organisations giving more attention to improving Cloud FinOps as a function or approach. Cloud FinOps, short for Cloud Financial Operations, is a set of practices that help optimise cloud spend. Cloud operational management is often decentralised, with costs that can be hard to predict or control. For example, cloud services costs often just arrive weekly or monthly as one large invoice to someone outside of IT with no real transparency on what is being invoiced for. Understanding these costs as an organisation is half the battle.
Following cloud cost management best practices or frameworks can result in the growth and development of cloud solutions in line with manageable costs. Examples of cloud cost management best practices include:
- Improved collaboration between business and technical stakeholders works towards a common goal of becoming more cost-effective and reducing cloud expenditure.
- Increase transparency by utilising reporting, resource tagging, and other cost management tools
- Track and monitor the creation and running of cloud resources.
- Establish clear internal responsibility of cloud costs to appropriately assign expenses.
What are the other ways to reduce costs?
This is only half the story, as robust Cloud FinOps is underpinned by different processes aiming to improve and enhance an organisations approach to managing cloud spend. There are other ways to reduce costs which range from straightforward to more involved:
Decommissioning
Many organisations have multiple legacy systems storing data. These systems are often:
- Not used regularly
- Replaceable with a modern equivalent
- Expensive to maintain and keep live
- Require specialist knowledge to integrate with and accommodate
Fewer legacy systems regularly result in simpler data architecture and lower costs from the time invested in the above.
Through identifying valid candidates for decommissioning, a business case can be created to support migrating from and/ or closing down these legacy systems.
Resource planning/scaling
Cloud resources utilise computing power and storage measures to establish an overall cost.
Some processes may be using too many resources or running more often than necessary increasing cloud bills. Reserving resources for longer periods of time will ensure cost optimisation for your cloud expenditure.
Consider ingesting data for a report:
- Does the ingestion pipeline need to run as often? For how many months/ years?
- Would it be an issue if it took longer to run?
Amending such factors to scale down resources whilst accounting for the impacts can result in an overall reduction in cloud spending
Cloud Platform Modernisation
Sometimes, a resource-intensive process is still required but costs your IT teams a lot of money to maintain and run.
Re-engineering a pre-existing solution by using more up-to-date and efficient methods may result in cost savings through solutions running faster and being easier for your IT team to maintain.
This approach also allows to alter or augment the solution during this modernisation process.
An up-to-date process that is deemed to be an industry-standard regularly provides more flexibility and cost-saving options than a legacy process or technical approach.
Look at all the money I can save!
Yes, but to a point. Knowing these approaches is different from applying them, as it is often not so straightforward that you can just delete some data, remove a system, shrink resources, or overhaul an inefficient process. Working with a business to know where to practically reduce spending or costs utilises a lot of previous experience rather than turning everything off (or, at worst just doing everything the Azure Advisor says regardless of the impact). Working towards a tangible plan, aligning stakeholders, and initiating the agreed actions are all important requirements to manage any dependencies or concerns and give the business value your organisation is looking for to reduce its IT spending.
At Oakland, we offer a holistic review and outline recommendations and options in an actionable report and give you a deliverable plan. We utilise our vast wealth of experience and are able to look against different lenses to focus the review. These include focusing on architecture design, engineering approaches, governance management, ESG, strategic and tactical alignment, and even market trends. The output is a clear, tailored plan to result in reduced cloud spend / improved Cloud FinOps.
If you would like to find more information about how we can help reduce your cloud spend, please get in touch by emailing hello@theoaklandgroup.co.uk or calling 0113 234 1944.
Jack Evans is a Principal Consultant at the Oakland Group.