Is your business overpaying for the cloud?

By:  Rob Curls

Ask anyone who has adopted cloud services why and they’ll likely mention the costs. Often the primary driver for attracting organizations to cloud, cost and value are the metrics by which businesses evaluate hosting and cloud services.

Yet, according to 451 Research, 75% of surveyed businesses indicate that budget and cost is either a moderate or significant impediment to their use of cloud. So what is getting in the way of businesses effectively extracting cost benefit from the cloud platform? If you believe your organization is overpaying for cloud, or not getting the value you expected, keep reading for an understanding of how to solve your cloud cost issues.

The right environment for the workload

First, if you aren’t benefiting from the elasticity of a cloud, there may be a more cost effective environment for a more predictable workload. Selecting the right cloud platform that matches the required service level agreement, uptime, performance level, compliance and security standards is crucial to determining your optimal spend.

Second, optimizing cloud platforms is a pretty complex task and an area in which skill gaps abound. Identifying the workloads, putting them in the right place, controlling server sprawl and configuring correctly can create enormous differences in the cost.

Areas of Potential Savings

One tactic for cost control is using reserved instances. This method allows you to commit to a certain amount of resources for a specific amount of time.  The 451 Research Cloud Pricing Index indicates that currently committing to reserved instances, or the equivalent, can produce savings of around 30% versus using pure utility.

Improper capacity planning and server sprawl is another issue that creates inflated and erratic invoices from public cloud providers. Unlike on-prem infrastructure, a virtual server should be planned for 13% capacity, leaving the rest for peaks in usage.

If you have a large workload that’s going to run 24/7, it may make sense to run it in a private cloud because you can get a flat rate in that case. Alternatively, if the workload is something that you park and spin up and down as needed, the elasticity in the public cloud makes a ton of sense. Finding the optimal mix is key, and being able to engage with experts that can provide that level of service can save you tens of thousands of dollars.

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Opportunity loss

Just under 50% of businesses in 451 Research’s survey believe they have a gap in skills associated with hosting in cloud services, which is likely under-reported. In addition to the technical areas to examine to save on cloud workloads, there is also the opportunity loss associated with delayed deployments, applications pushed onto an ill-fitted platform and other setbacks that organizations face.

One of our customers comes to mind. The development team started building a new customer-facing application in one of the big public clouds and didn’t fully consider the infrastructure component and cost structure. But there’s a big difference between the development of an application and its deployment. Once deployed, the cost of running the application went from $20K in the first month to $50K, and ultimately to $90K.

While the public cloud makes it easy to spin up new environments, there’s still a lot of design work and collaboration between different groups with different knowledge sets that needs to take place. Otherwise, you can end up in a scenario where the benefits you wanted, like lower costs, better performance, and tighter security, aren’t there because the environment wasn’t configured properly.

When an organization gets trapped in what we like to call “public cloud jail,” meaning they’ve designed in a cloud and it’s more time consuming and costly to move to a different platform, there are opportunity losses in the form of time, costs and innovation.

Evaluating the costs

If your organization has started down one path for public cloud adoption, it is still worth assessing how to manage improve the results. A total cost of ownership assessment from a cloud advisory team like Concerto’s is an invaluable way to get an apples-to-apples comparison between on-prem, private cloud, and public cloud options. And even if you feel comfortable with your approach, consider getting an outside opinion from a team that has seen hundreds of public cloud projects to really understand how your current spend levels compare.

Disclosure: This article was provided by Concerto Cloud Services, an sponsor.

About Rob Curls

As a Solutions Consultant for Concerto Cloud Services, my primary focus is educating customers on technologies that are available and designing solutions that will achieve their strategic objectives. With a focus on cloud solutions, my responsibilities include architecting complex workloads utilizing best of bread technology and service providers, developing and presenting in person and online presentations and demonstrations with customers and industry experts, as well as working with our team to ensure we stay on the cutting edge as a cloud service provider.

With more than 14 years of technology experience, I have a diverse background which has enabled me to work in challenging industries such as Healthcare, Professional Services, and Defense. I’ve consulted organizations ranging in size from small start ups to large globally dispersed organizations, and I’d love the opportunity to sit down and discuss your needs.