Levi, Ray & Shoup, Inc.

Avoiding cloud cost pitfalls

8/16/2018 by Michael Gallagher

By Michael Gallagher

Just in case you’ve been wondering about the State of the Cloud, RightScale has the answer. The cloud management company released its 2018 State of the Cloud Report earlier this year, and it shows that companies are, on average, leveraging 4.8 different clouds to support their business.

Cloud adoption is no longer a question of if but how and which ones, so you need to focus on creating the right mix of clouds in support of your business.

Per the report, hybrid cloud computing is emerging as the cloud computing model for most clients. This is primarily because it leverages the benefits of both on-premises and cloud to provide the best flexibility, scalability, and agility. While cloud solutions provide many benefits, they also have their challenges. One of the most prevalent challenges we see is related to cost management of public cloud and hybrid cloud.

Optimizing Cloud Cost is Key

The RightScale survey found that optimizing costs for cloud computing tops the list of client cloud priorities. This comes as no real surprise to anyone that has moved workload to the cloud.

Public clouds may look like a low-cost alternative to traditional infrastructure, but costs can quickly increase due to things like data transfer, software licenses, and heavy utilization of dynamic scale-up of the environment. Cloud, by design, is very easy to consume, making spinning up new instances simple while bypassing the company’s traditional procurement and governance workflow.

Capital expenses typically flow through a process of evaluation and expense sign-offs/authorizations. Cloud workload deployments often start small, under the procurement radar. Yet, without governance, these small initial cloud environments can quickly grow without management even realizing it. Since cloud usage is billed in arrears, many a CIO has been hit with a whooping OPEX cloud invoice they had no visibility to.

Keep an Eye on All Costs

In addition to compute and storage usage costs, you must keep an eye on other areas of potential costs. Software licenses are a big one, for example. Often companies forget that they may require duplicate licenses for their cloud environment, until they are able to shut down their on-premises environment.

Performance is another potential pitfall. If you do a “lift and shift” to the cloud, for example, the application will not likely be optimized for the cloud and you will need to remediate performance issues by throwing more resources at it, driving up your costs.

Automation Extends Cloud Benefits

Hybrid clouds are designed to leverage automation.

For example, cloud workloads can use automation triggered by predictive auto-scaling to recognize changing performance metrics in real time and spin up additional instances or resources without human intervention. Your real automation benefits come from the opposite however. Being able to use these same metrics to spin-down environments when workload decreases will greatly reduce your spend.

This end-to-end automation across the IT environment allows your IT services team to dynamically adjust workloads automatically based on the point in time needs of the business. No more buying hardware sized to handle your peak workload and then run it underutilized during slower periods!

In summary, be prepared to leverage multiple clouds as part of your strategy. Let your individual use cases drive the cloud provider decision. Don’t limit your cloud environment; after all, now is an excellent time to take advantage of the cloud marketplace’s competition.

Not all cloud providers deliver consistent services, so test out different services to find the ones that work best for your needs. Building in multiple cloud providers into your strategy will also help you avoid cloud provider lock in.

Lastly, make cost management and governance key aspects of your cloud strategy. Without them, your costs will quickly escalate, and any savings associated with a move to the cloud will evaporate.

About the author

Michael Gallagher is Business Development Manager for Cloud for LRS IT Solutions. He has more than 30 years of experience selling IT products and services. By keeping his head in the Cloud, Mike focuses on providing down-to-earth solutions for his clients.