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4 ways you may be wasting your cloud spend, and how to avoid it

June 05, 2020

One of the big reasons businesses choose to take advantage of cloud computing is to become more agile and save resources across their business. But for many companies, unregulated cloud usage, unclear business goals and badly planned resources can push the cloud spend  way beyond what was initially forecast.

In 2019, Gartner estimated that businesses spent approximately US$206.2 billion on public cloud, with infrastructure as a service (IaaS) accounting for roughly US$39.5 billion. The same research found that businesses waste roughly US$14.1 billion in cloud spend, largely as the result of idle and oversized resources.

As cloud adoption rates continue to accelerate, it might be time to take a closer look at how well you are using your resources. Here are four of the main reasons you may be spending more on your cloud resource than you need to, and how to avoid unnecessary costs:  

1. Idle resources

Idle resources is a term used to cover cloud resources that businesses pay for by the hour or minute, but don’t end up using as effectively as they could. This usually occurs in business’s non-production environments, such as for development, testing, staging, and quality assurance. In most instances, non-production resources are only used during the working week, and don’t need to be up and running 24/7. So, if you’re paying for resource over the weekends and during business holidays, that generally means it’s sitting idle, making this an easy area to save costs.

Take action: Identify resources that don’t need to be running all the time and see if you can move to a more flexible consumption place. Eliminate instances that are no longer being used, such as temporary instances for projects that have ended. Remove unnecessary or outdated services, and be sure to also decommission accounts attached to redundant services.

2. Oversized resources

Could you be paying for a larger capacity than you need? This is a common occurrence, which usually happens due to the many unknowns when migrating instances from on-premises to the cloud. Businesses may be unsure whether an instance requires the equivalent size in the cloud, whether they have the same performance characteristics, and what sizes provide maximum value. Most of them guess and, afraid of having too few resources available, end up overprovisioning. That’s how many businesses find themselves using instances that are at least one size larger than needed for their workloads. By sizing down, they could easily save costs.

Take action: Downsize instances that aren’t used often or require low compute power and switch to a lower cost band. Take advantage of discounts where possible, and move instances that are running in higher-cost regions to lower-cost regions. Downgrade storage where possible. If you need it, you can always upgrade again later.

3. Lack of automation

Many businesses move to the cloud and then don’t take the necessary steps to optimize their cloud investments, failing to realize that their cloud spend changes as resources are constantly added and removed. So one-time optimization of an enterprise’s cloud spend won’t be enough; businesses need to identify waste and resolve it to ensure cloud spend is under control on an ongoing basis.

To optimize these fast-changing cloud environments, businesses are turning to automation to continuously monitor and resolve issues with unused, idle or underutilized accounts; and identify high-cost regions that can be moved to lower cost regions.

Take action: Analyze your cloud use and automate processes to close down unused resources and dynamically adjust to take advantage of more cost-effective storage areas.

4. Unclear picture of total spend

The very nature of cloud computing allows businesses to scale their resources up and down on demand, but to use it effectively, they need to monitor usage. Accurate tracking is extremely important as cloud pricing varies drastically depending on a number of factors, including but not limited to the storage region and hours when the resources are running.

At a first glance, cloud subscription costs may seem low, but if you don’t have a clear view of what resources you’re using and when, where they’re stored and what rates you’re being charged, costs can quickly add up over time.

Take action: Keep track of your usage. Ensure you’re receiving reports that show you the true costs of your cloud use, and act on the areas highlighted where you can adjust provisioning. 

Using the cloud to your advantage

As businesses plan for a future of ever-shifting consumer demands, many are turning to cloud-based tools and resources to gain greater agility and scalability.

Retailers in particular are turning to two key technologies, cloud computing and unified commerce platforms, to connect their processes and channels and to personalize the consumer experience. Leaders in the industry with successful cloud strategies are able to actively manage idle and oversized resource, saving costs while at the same time delivering highly differentiated consumer experiences that wow shoppers and encourage them to come back.

 

Source: Written by Giada Pezzini | LS Retail.com

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