5 Tips for Keeping Your Cloud Costs Under Control

Published: Feb 27, 2020

The Cloud has become an indispensable data storage tool for businesses, particularly IT departments. It is estimated that the average enterprise uses more than one thousand Cloud applications every day. The Cloud has gained such popularity due to the flexibility and benefits that it can offer. However, despite its undeniable benefits, Cloud costs management is one of today’s toughest challenges for IT leaders.

Individual Cloud costs can, at first, seem deceivingly small, however, over time they mount up (particularly if your organization has a shadow IT issue). If these costs are not carefully monitored and managed businesses are likely to exceed their IT budgets.

The use of the Cloud in business is now almost as common as the use of the internet. Therefore, understanding how to optimize and forecast your Cloud costs to avoid your spending going to waste should be a priority.

Before you implement a new Cloud cost management strategy be sure to consider all of the relevant aspects. Here are some tips on how to keep your costs under control.

Implement a Cloud Cost Control Through Governance Strategy:

As Cloud use increases and costs escalate, it is becoming increasingly difficult to manage Cloud spending. To avoid substandard contracts and unnecessary spending, implementing a governance strategy must be considered before you create a cost management strategy.

Appointing leaders from a variety of departments including IT, finance, business, and procurement to establish best Cloud practices and cost optimization processes, leverage IT guidelines, and negotiate budgets will encourage IT oversight and relieve cost pressures from IT.

Considering governance before management ensures the entire business complies with IT’s spending guidelines and will allow the IT department to focus on driving business results and value.

Budget Carefully and Accurately

The first step towards an accurate budget is assessing the number of your employees for whom access to each Cloud service is vital. Most Cloud licenses are issued on a user-per-user basis, therefore if you underestimate the number of employees who require access you will need to upgrade your subscription. Be sure to always build some upwards flexibility into your budget as user usage may fluctuate.

Paying for unexpected subscription upgrades as a result of inaccurate user number estimates is a common issue that leads companies to exceed their cloud budgets.

It is also possible to overestimate your usage and waste your budget on paying for unnecessary user subscriptions. Keep on top of employees who have left your organization or no longer use that system as part of their role to save some costs.

Integrate Your Services

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Using both on-premises and Cloud resources (hybrid cloud integration) is not uncommon. Doing so allows the existing databases, applications, and systems that run from your organization’s computers to seamlessly integrate with Cloud-based applications. Not only does this method solve the issue of efficiency between off and on-premises systems, but it also allows for easy cost monitoring and comparison across all your business services.

The option of integrated or hybrid infrastructures is not an ideal solution for all businesses, but for larger companies service integration is a great way to manage and control your costs.

Don’t Store Unnecessary Data

How much Cloud storage you require is a determining factor in the amount you pay. Many organizations store all incoming data, of which the unused or unnecessary data is sent directly to the cloud.

Keeping this worthless data takes up valuable storage space that could be utilized elsewhere. Make sure to regularly assess the data in your Cloud storage and remove anything that your business does not require.

Consider creating a Cloud data management plan that helps you determine which files should be kept on the Cloud and which could be stored in a lower-cost local server. Additional backup files are a great example of data that your company could move from your Cloud storage to a lower-cost server.

Manage Your Assets

End-user departments often engage Cloud services without notifying the IT department, which can lead to significant additional Cloud spends accumulating within company-wide budgets. Implementing an automated IT asset management system will not completely eradicate shadow IT spending, but it can help you detect newly launched applications so that you can view and manage the associated costs, which can then be included within the IT budget.

Part of your organization’s IT asset management strategy should also be dedicated to removing cloud services that are either underused or redundant. The costs you save by removing these applications can quickly mount up.

In Conclusion:

Exceeding budgets and wasting spend on unused Cloud applications are easily avoided problems. According to Wavestone US (a top IT and business advisory firm), there are two fundamental steps to take towards Cloud cost management. Firstly, ensure that all of your cloud applications are optimally placed and then focus on implementing control measures through governance.