Strategies you can implement now to rein in cloud costs

A blog post by David Linthicum, Chief Cloud Strategy Officer.  

Cloud costs are rising, mostly because of increased demand for cloud services, complex pricing models that make it difficult to match price to value, lack of visibility into consumption of cloud services, and potential waste due to inappropriately allocated and used resources. To tackle this challenge, companies can implement several strategies to help mitigate rising cloud costs, optimize their cloud spending, and increase their cloud value.

First up is FinOps, which involves aligning technology usage with financial goals to optimize cloud spending. Next, companies can leverage cross-cloud abstraction and services to manage multicloud complexity, gain better visibility and control across the cloud ecosystem, and optimize resource utilization. Finally, they can consider repatriation—moving workloads from the cloud back to on-premises or other infrastructure options—for workloads that might be better suited for on-premises operation.

FinOps to optimize cloud spend

FinOps focuses on optimizing cloud costs by aligning technology with business objectives and financial goals. Finance, operations, and development teams collaborate to monitor, analyze, and optimize cloud spending. There are several benefits to using FinOps:

• Cost optimization: FinOps provides better visibility into cloud spending and helps identify waste or inefficiency, so enterprises can take corrective action to optimize cloud costs, which can result in cost savings.
  
• Business alignment: FinOps’ focus on collaboration between finance, operations, and development teams to align business and tech goals helps ensure that cloud spending is aligned with strategic priorities, leading to better business outcomes.
• Operational efficiency: FinOps can help establish better processes for monitoring, analyzing, and optimizing cloud spend. This can lead to improved operational efficiency, which helps resolve cloud cost issues quicker, reduce manual efforts, and optimize resource utilization.
• Data-driven decision-making: FinOps relies on analytics and a data-driven approach to inform cloud spending decisions. With FinOps, enterprises can make better decisions about cloud usage, resource allocation, and cost optimization—leading to more strategic and effective cloud spending decisions.

Cross-cloud to manage complexity

Cross-cloud abstraction and services involves using tools or services that abstract the underlying cloud infrastructure and provide a unified management layer across multiple cloud providers. This can help manage the complexity of multi-cloud environments and enable better visibility and control across the cloud ecosystem.

By having a unified view of resources and operations across different cloud providers, companies can also optimize their cloud spending by identifying redundant or underutilized resources, managing workloads efficiently across clouds, and leveraging cost-effective options provided by different cloud providers. This can result in cost savings and increased cloud value by leveraging the strengths of different cloud providers.

Finding the right fit for workloads

There’s been lots of heated debate recently about repatriation, or the process of moving workloads from the cloud back to on-premises or other infrastructure options. Obviously, I think cloud has become the de facto IT architecture and offers advantages that on-premises solutions don’t. But repatriation is not necessarily a bad thing. In fact, some workloads probably belong in house rather than in cloud. So it’s important for companies to periodically evaluate their workloads and determine if they are best suited for the cloud or on-premises infrastructure based on factors such as performance, security, compliance, and cost.

Some workloads may be better suited for on-premises infrastructure due to factors such as data sovereignty requirements, predictable workloads with stable resource requirements, or cost considerations for workloads with low resource utilization. By evaluating workloads and making informed decisions on where they best fit, companies can optimize their cloud spending and increase their cloud value.

When deciding where a workload fits best, several criteria should be considered. These include:

• Scalability and variability: Workloads with variable resource requirements or those needing to scale up or down rapidly may benefit from the elasticity and scalability of the cloud, making it a better fit for such workloads.
• Performance: Workloads with high performance requirements, such as those needing low latency or high throughput, may perform better on dedicated on-premises infrastructure compared to the shared resources of the cloud. This one really depends on volume and organization preference, though.
• Security and compliance: Workloads with stringent security or compliance requirements may need to be kept on premises or in a private cloud to maintain control over data and meet regulatory requirements.
• Resource utilization: Workloads with predictable and stable resource requirements may be more cost-effective to run on premises or in a private cloud, where companies have more control over resource allocation and can avoid paying for unused resources.
• Cost: Cost considerations, including factors such as data transfer fees, storage costs, and compute costs, should be evaluated when deciding where a workload fits best. Some workloads are better suited for cloud; some are better on premises.

The bottom line

As cloud costs rise, it is crucial for companies to implement strategies to optimize cloud spending and increase cloud value. This can be achieved through practices such as FinOps, leveraging cross-cloud abstraction and services, and making informed decisions on workload placement. By aligning technology usage with business objectives, leveraging the strengths of different cloud providers, and evaluating workloads based on various criteria, companies can optimize their cloud spending and achieve better cloud value.