The stats are in, and cloud is proving a winner. According to RightScale’s 2018 “State of the Cloud” report, 96% of businesses have embraced at least one cloud based service.
And whilst many businesses took up the cloud as a way of reducing costs, some analysts have found that companies overspend on cloud services by an average of 35%.
Why? Several reasons.
- Often business will pay for more storage space than they require.
- Unnecessary Features. Paying for high-powered virtual machines when less powerful ones will do.
- Better safe than sorry. If a business was unsure about their cloud computing needs at time of adoption, they may have looked at the presented options and taken more than they needed using a better safe than sorry” approach.
- Pricing Options. If a business doesn’t fully understand the cloud service pricing options, which can often be numerous and complex, money is easily wasted.
- Failing to rationalise and optimise. A common cause for businesses overspending on cloud services. By not optimising their systems before moving them to the cloud, they incur higher costs through consuming more cloud service resources.
Ways to Avoid Overspending
- Details matter. If you want to store your business data in the cloud, you need to know the types of data, how much you have, and how often employees will need access to it. Such details will help you select the most appropriate cloud service plan.
- Avoid “just in case” thinking. This line of thinking applies to older, on-premise IT environments. Back then businesses needed to build IT infrastructure that could handle the occasional spike in demand. They purchased servers with large amounts of CPU power and memory. Thinking this way about cloud services leads to overprovisioning, and increased costs. Your cloud solution needs to be provisioned based on your average consumption. Let the cloud service provider worry about and deal with the occasional spikes instead.
- Know your options and their costs. While it’s good to have options, sometimes they can be overwhelming or confusing. Especially so when it comes to cloud hosted virtual machines. The cost of an instance varies depending on its CPU power, amount of memory, the region it’s located, and other factors. If you are not sure which options are best for your business, seek more information.
- What’s included in the recurring monthly service fee? Check for any hidden extras. Backups for instance, some cloud service providers charge a retrieval fee whenever customers need to access their data. Discounts? Does your cloud service provider charge a lower price if you reserve resources, such as virtual machines?
- Optimise, review, optimise again. Ensure your systems are as lean and as efficient as they can be before sending them to the cloud. If your business stores data in the cloud, make sure to get rid of duplicate data, in fact any data that your company no longer needs.
Time Well Spent
Overspending never makes good financial sense. Therefore, it pays to take the time to understand the specifics about your systems, and the various cloud service providers’ offerings. We can help on both fronts if you need assistance.