How to Avoid Runaway Cloud Costs

With more and more enterprises adopting the public cloud, it’s not uncommon for an organization to experience a bit of sticker shock when it comes to how much they’re spending on the cloud.

This can happen due to a variety of reasons, including the number of projects your organization has in the pipeline, as well as the pricing model cloud providers use—a model that benefits both parties but can easily make it possible for an organization to lose track of the amount they are spending.

The good news is there are a number of practices and tools—many of which are provided by the cloud platforms themselves—that you can use to ensure the amount you invest in the cloud doesn’t overshadow the amount of cloud real estate you actually need.

Below are four steps you can take to successfully manage and govern your cloud spend so you won’t blow up your budget.

Step 1: Analyze your spend

• Before you can find efficiencies in your cloud spend, you need clear visibility into where your costs are coming from. To get this, you need to identify:
• Your cloud usage among your different business units
• Your peak usage times
• Any inefficiencies in your workloads
• Your current cost monitoring measures
• Once you have visibility into how (and how much) your various teams are using the cloud, you need to get every member of your organization on the same page. That leads us to …

Step 2: Align your organization

While any cloud cost governance measures you put in place need to be followed by every part of your organization, these three segments are especially important to keep your cloud spend under control: business decision makers, developers, and finance.

Here’s why:

• Business decision makers need to understand the reasons for cloud usage and spending
• Developers need to work efficiently to reduce wasted time and resources 
• Finance needs to understand that developers require flexibility in how/when they spend money firing up VMs in the cloud

Unless these three critical branches of your organization are aligned in why and how you are using the cloud, keeping costs in line will continue to be a challenge.

Step 3: Optimize environments

To find efficiencies in your workloads and cloud spending, you need to ensure your environments are right-sized. This means:

• Allocating VMs based on actual usage
• Automating run times for non-production environments
• Identifying underused VMs
• Exploring cloud provider discounts and tools

While these optimizations can be handled internally, more often than not organizations seek out a partner for this step due to lack of time or on-hand expertise. 

Partners can also help you find provider discounts and identify powerful tools, like Azure Cost Management, that are focused on keeping cloud spends manageable and visible.

Step 4: Monitor

Simply finding efficiencies is not enough to keep your cloud costs in line. You need to continually monitor your organization’s usage and resources. You also need to keep a watchful eye out for potential anomalies. 

Sticking with Azure, here are some of the tools you can use for ongoing monitoring of your cloud usage:

• Azure Resource Manager for creating, updating, and deleting resources
• Azure Advisor to implement reservations, right-size environments, and reduce idle resources
• Azure Cost Analysis for detailed breakdowns of your spend on a continual basis

Beyond these available tools, any reputable cloud cost governance partner will also help you implement governance policies that oversee budgets, cost allocations, and chargebacks as well as resource automation to help you reduce your VM usage during off-peak times.

Whether your organization is new to the cloud or you are already using a public cloud platform, following best practices for cloud governance has very real benefits for your bottom line. In fact, companies that work with us to reign in their cloud spend save an average of 40-60%. 

Dive deeper into how to address the challenges and unlock the benefits of taking your enterprise to the cloud. Click here to read our full, in-depth guide on adopting and migrating to the cloud.