Cloud Overspend: Main Causes & Mitigation Solutions

According to Gartner, spending on cloud system infrastructure services is expected to grow from $44 billion in 2019 to $63 billion in 2020, reaching $81 billion by 2022.

The cloud offers a level of flexibility that companies cannot get by using in-house servers. Scaling up and down is almost always easy. Also, as we saw this year with the massive shift to working from home, if things suddenly change in the workplace, you can easily adapt by allowing people to work from wherever they need to.

Cloud computing can also be deployed faster, it can happen in minutes instead of the long time you usually need to add physical servers.

Nonetheless, the biggest difference is the cost. Not having physical servers that need maintenance will allow you to save money. Also, you do not need someone on-site to manage and maintain them. With the cloud, all of that is taken care of by the service provider.

What leads to cloud overspend?

Let’s see how that happens and what you can do to prevent it.

The Multi-Cloud Approach

Mid-size companies are using an average of seven different cloud providers for the applications and services they use. The multi-cloud approach is not bad on its own, but there are some associated costs that add up. Everything from security mitigation to reporting must be done repeatedly over your various cloud providers which is time consuming and finding someone to manage your cloud stack will generate additional costs.

Cloud Provisioning

Some executives, rather than waiting until their businesses need more capacity, they order more than needed. This usually happens because when you are running physical servers, adding more server capacity takes time. You cannot just double or triple the number of servers you are working with one week, then scale back the next week. You must order everything few weeks in advance. When you come to the cloud with the same mindset, you end up with lots of unused resources that most likely never get used but cost you money.

The real issue here is not that you end up with stuff you do not actually need, but you also lose sight of all the hidden costs associated with these services. API calls, vendor lock-in, and even premium support packages can all add to your costs if you do not pay close attention to what you buy.

Cloud’s Not Cheap

Cloud can be cheap. The problem is that it is easy to lose track of how much you are spending and where. There are many aspects that take the cloud from a reasonable expense to a considerable expense, but you can get those costs under control with the right approach.

Mitigation Solutions

Reducing cloud overspend is not quite as easy as wasting all that money was in the first place, so the effort you put into eliminating it is significant.

Pay Per Use

Firstly, conduct an audit to determine your usage habits. By analyzing your usage, you will probably discover some areas where you are spending more than needed. Things to look for include whether you are using all the features in the plan you have purchased. It is one thing to have the pro-level software suite that a company offers, but if you are not actually using a large percentage of the tools they offer, you should just drop down to the next level. The same thing goes with storage. If you have a lot of unused cloud storage space, get rid of it. In case you suddenly need more, you will not be in trouble, adding cloud resources is easy.

Audit Regularly

When you are auditing your cloud usage, verify details like the software you are using, how many people are using each tool, and how many cloud resources you are consuming. This will establish if you have got unused software licenses, if you are paying for instances that are not being used, etc. All these are areas where you are likely to find overspend. The golden rule here is to keep auditing to make sure you are not overspending again. You cannot just do it once and consider the problem solved. Auditing is going to save you a lot of money, especially in the long-term.

Cloud Optimization

Optimization will always reduce spend. A lot of what you are going to find in terms of optimization will be aspects we have already discussed in this blog, but there are other, more technical aspects you can look at to lower your cloud spending, things like: workload modeling, workload automation, and rightsizing services.

The main goal is to get the cloud working as smoothly as possible and get rid of anything that is not configured, to maximize your organization’s benefit.

Partner with Experts

Businesspeople do not have the time nor the expertise to really manage cloud spend within their organization. Therefore, partnering with a team of cloud experts can help. Not only we can provide you with a reliable team of experts to help you manage your cloud, but we can do it cost-effectively. If you are ready to reduce cloud overspend and fully optimize your business, let’s talk. We love helping our customers use the benefits of top-notch technology without breaking the bank.