It is no secret that the cloud is the future of business operations. Gartner predicts that global spending on cloud services will reach over $482 billion in 2022. That is up from the $313 billion in 2020.

Reduced costs are the main reason small and medium-sized businesses move their infrastructure and applications to the cloud. 

In fact, a study by McAfee shows that companies using cloud services generally experience a 19% increase in process efficiency and a 15% reduction in IT spending.

While the cloud may appear be more cost-effective in theory, it’s not always cheaper in reality. 

64% of IT leaders say “cost management and containment” is the biggest concern with utilizing the cloud because more than one-third of businesses overrun their cloud budget by up to 40%.

As these risks show, small and medium-sized businesses (SMBs) could lose thousands of dollars to unused cloud resources if they fail to manage the cloud correctly. 

Managing Cloud Spending: The Common Challenges 

While the cloud can be a cost-saver, cloud spending can also quickly become uncontrollable and damage the bottom line. 

Most cloud providers have automated tools to help organizations manage cloud spending. However, these tools aren’t automatically included in their offers. This leaves it up to the organization to monitor and govern cloud usage. 

However, many companies use multiple cloud services. This makes it difficult to keep track of what resources are being used and where they are being used. 

Moreover, many organizations do not have a strategy in place for the cloud at all. Gartner found that less than 30% of organizations have a documented cloud computing strategy.

The flexibility of the cloud can also work against companies at times. The ability to rapidly scale resources up can ruin budget forecasting efforts. Moreover, some companies may forget about instances that they have ‘scaled up’ and are now redundant. This means that they are paying for additional cloud space that is not being used. 

These risks should not put organizations off from the cloud. The cloud just needs better management just like any other expense. 

Here are a few ways to better manage your cloud spend. 

Choose Reserved Instances

While the pay-per-use model is attractive to many SMBs, it is not necessarily the most cost-effective option out there. Reserved and spot instances can be much better from a price perspective.

With a reserved instance, you will commit to using a certain amount of capacity over a period of time. Such instances typically come in at one-third the price of on-demand resources. All of the major cloud providers offer reserved instances. 

Embrace Capacity Planning

The cloud enables organizations to scale their usage up and down quickly. If this process isn’t managed correctly and thoroughly, companies can easily end up paying for unused resources and blow their budgets. 

Many leading cloud providers offer autoscaling resources that help organizations avoid paying for unused cloud capacity. These features work by monitoring and adjusting application usage to ensure maximum efficiency.

Limit Data Transfer Fees

Uploading and downloading data to the cloud comes with a cost. Cloud providers charge data transfer fees to move data out of their platforms and even to different regions. 

While some data transfers are necessary, you can dramatically reduce costs by ensuring that you cut down on these transfers to only what is absolutely required. 

Harness Cost Monitoring Tools

Many business leaders have felt the heart-jumping moment of opening their cloud bill and seeing a figure way above what they expected.

The good news is that there are tools out there that can monitor cloud spending so that there are no surprises. 

These tools range from forecasting tools (which predict your cloud spend based on past usage) to alert programs that flag when you are near the top-end of your desired budget. 

If you’re not sure where to start with these tools, our dedicated cloud team can talk you through the various options to help you find the solution that is right for you. 

Stop Cloud Sprawl

Cloud sprawl refers to redundant cloud applications and storage that organizations forget to switch off after a project is over. 

Eliminating these redundant instances is a quick and effective way to reduce unnecessary cloud spending. However,  it is not always easy to discover these servers. 

In order to combat this issue, you need to develop granular visibility of your cloud environment. This can be achieved by using application monitoring and management tools.

It would be best to put policies in place that explain how and when employees should decommission redundant cloud instances. 

Get Expert Help Streamlining Your Cloud Use & Save Money

Sound Computers can help your Connecticut business eliminate cloud waste and optimize your cloud workflows.

Contact us today to schedule a free consultation. Call 860-577-8060 or reach us online.

February 15, 2022
Sound Computers Admin