Cloud Expense Management: How to manage cloud spending

Companies will continue to lean into cloud computing – Get ready for more cloud as-a-service models

Cloud computing proved its mettle a million times over in 2020. In many unprecedented ways, the cloud came through from supporting remote workforces to keeping the global economy and supply chains moving. According to Forrester Research, it’s for those reasons and others that the public cloud market is expected to grow 35% in 2021. This growth spurt will continue as companies lean into the cloud to build on their competitive edge, relying heavily on cloud expense management. Interconnected organizations can use the cloud to share IT resources and data in real-time, and they can scale their IT infrastructures or down, depending on business needs. These cloud as-a-service models deliver business agility and remove the burden on internal IT teams to perform maintenance and keep software and systems current. And because businesses technically only pay for what they use, costs are more predictable with fewer one-time, big hardware and software purchases are needed. So what does all this mean for the coming year? Will companies go back to their comfortable, legacy IT ways? Or are more cloud services here for good? And, finally, how can you keep cloud costs in check? Let’s explore what these cloud trends can mean for your business.

It’s about the journey, man

Most industry insiders agree that in 2021 and well beyond, we’ll continue to see a shift and adoption of cloud services. More than using the cloud for triage, such as rapidly supporting remote workers, organizations will look to refine cloud investments to achieve even more significant savings or performance gains. That’s because organizations realize that moving to the cloud doesn’t translate to cost reduction or improved service delivery. Successful cloud deployments require a dynamic process of matching the company’s goals to cloud services and continuously monitoring and tweaking cloud services to meet immediate needs and long-term goals.

A new focus – Managing cloud spending

While many took a fast-and-furious approach to cloud deployments last year, looking ahead, companies need to focus attention on keeping costs in check. Estimates vary, but it’s not atypical for companies to waste as much as 35% of their cloud budget! That’s because it’s so easy to spin up resources, add services, or experiment in the cloud. Complex contracts, a lack of central control, and spotty visibility into cloud resources can also balloon cloud spending that may go unnoticed – until it’s too late. Experts recommend several tips for getting smart about cloud expense management. 

• Only store what you need – Companies often fall into the trap of storing obsolete data. Have evaluation criteria in place for evaluating data storage needs.
• Tie cloud services to revenue – Train IT teams and other groups to link each type of cloud spending to specific revenue streams. Think – ‘It costs X for these systems (could be multiple cloud services), and our revenue is Y. Is the cloud service justified? Can we downgrade?’ Or does one revenue area have a growing opportunity from increased customer demand? Then, it may be worth adding capacity to that area.
• Don’t wait until the end of the month – Unlike other ‘monthly service fees,’ users can view cloud usage-based real-time data. Use tools to monitor cloud usage and gain visibility into their cloud and as-a-service spending. Then, use that information to optimize resources continuously.
• Centralize resources – Often, various groups within an organization receive a bill for cloud services because each has different pricing models and discounts. A centralized IT team in close contact with financial executives can understand what resources are available, build consensus, and identify potential savings.

Strategize now, spend less later 

With cloud models, development services, tools, and infrastructure are available to businesses, practically on demand. While we don’t know exactly what’s ahead, it’s pretty clear that companies will need this level of flexibility to stay adaptive and stay relevant. The next challenge is finding ways to optimize the cloud infrastructure, spending, and contracts to monitor costs and identify areas where overspending is likely. Do you have predictions for the cloud for 2021? Or do you want to hear recommendations about optimizing cloud resources? Call or email us to talk about your cloud monitoring tools and mobile strategies today.