Cloudflation Part 2 of 2: A Blueprint for Managing Cloud Budgets [Free Checklist Included]

In the first part of this series, we covered the various aspects of cloudflation or cloud inflation - ranging from geopolitical tensions to the hikes by leading platforms. In this article, let’s take a step back and look at the challenges posed to business users not just because of this spike but let’s also look at the challenges of cloud computing in general.

Taking a cue from the previous article, 68% of IT managers across the world are worried about managing the cloud storage cost already, with this spike across popular cloud storage platforms, this issue is going to stay.

Let’s take a dig into what are these factors that are making cloud storage costs a serious issue for IT managers:

Majority of cloud platforms catering to enterprises have some best practices guidelines to extract the best response from the platform, both in terms of performance as well as efficient storage practices to not pay for unused storage. But our cloud architects often see the best practices not getting followed that leads to chaos and unrealized cloud potential.

A poorly designed cloud architecture can result in inefficiencies and excess costs in areas such as resource provisioning, data storage, and network usage.

For example, if an organization has not properly sized its cloud resources, it may end up paying for unnecessary capacity or suffer from performance issues due to inadequate resources. Similarly, if an organization has not implemented proper data management practices, it may incur excess storage costs due to duplicate or unnecessary data.

To avoid these issues, it is important for organizations to carefully design their cloud architecture and implement best practices for resource provisioning, data management, and network usage. This may involve working with a cloud specialist or consulting firm to design an optimal cloud architecture and implement cost-saving measures.

Forecasting cloud storage usage can be challenging due to a number of factors. One key factor is the unpredictable nature of data growth. It can be difficult to predict how much data will be generated by an organization, and how much of that data will need to be stored in the cloud.

Additionally, the adoption of new technologies and business processes can drive changes in data storage needs, making it difficult to anticipate future usage.

Finally, changes in the pricing and availability of cloud storage services can also impact an organization's storage needs and budget. All of these factors can make it difficult to accurately forecast cloud storage usage and plan for future storage needs.

Hidden billing charges can lead to increased cloud costs for organizations. These charges are often buried in the fine print of cloud service contracts and are not immediately visible to users. Examples of hidden billing charges include data transfer fees, data egress charges, and fees for services such as machine learning and analytics. In some cases, these charges can be significant and can significantly impact an organization's cloud budget.

It is important for organizations to carefully review their cloud service contracts and understand all of the charges that they may incur in order to avoid unexpected costs. It may also be helpful to work with a cloud cost management specialist to identify and mitigate hidden billing charges.

Lack of visibility and poor cloud governance can lead to increased cloud spending for organizations. Without proper visibility into how resources are being used, it can be difficult to optimize usage and control costs. This is especially true in large, complex environments with multiple teams and departments all using cloud resources.

It is important to have a clear understanding of how different departments in an organization are using cloud resources and how much they are spending. This can be done by using cost allocation tags, which allow you to assign costs to specific departments or projects. Some of the common departments that use cloud resources include IT, Development, Research and Development, and Operations.

The costs for these departments can vary depending on the specific resources they are using, such as computing, storage, and data transfer. Additionally, other departments such as Sales, Marketing, and Human Resources may also use cloud resources for specific tasks, and their costs should be tracked and allocated accordingly.

Without proper governance in place, it can be easy for users to accidentally over-provision resources or incur unnecessary charges, leading to increased costs.

To address these issues, it is important for organizations to implement proper cloud governance policies and tools to ensure that they have visibility into their cloud usage and spending and that they are able to optimize their cloud resources and minimize costs. This may involve establishing clear roles and responsibilities, setting usage limits and quotas, and implementing cost monitoring and optimization tools.

Now that we've identified the main causes of high cloud storage costs check out this infographic where we have broken down the specific actions that most commonly contribute to high storage costs.

Cloud computing has revolutionized the way businesses operate, providing them with the flexibility and scalability needed to stay competitive in today's fast-paced digital landscape. However, as the use of cloud resources continues to grow, so do the costs associated with them.

A recent study found that the average organization is spending over 30% of its IT budget on cloud services. With costs continuing to rise due to the factors mentioned in the previous blog, it's essential for businesses to have a strategy in place for optimizing their cloud spending while leaving no value on the table.

Here are some strategies for IT Managers to optimize enterprise cloud costs:

1. Right-sizing: Utilize the cloud provider's tools and best practices to optimize the size of your resources (e.g. virtual machines, storage) to match your workload requirements, this can help you avoid over-provisioning resources and paying for more than you need.

2. Utilizing Reserved instances: Use reserved instances to commit to a certain usage level for a period of time, this can provide significant cost savings compared to on-demand instances.

3. Auto Scaling: Implement auto-scaling to automatically adjust the number of resources based on the current workload. This can help you avoid over-provisioning resources during low usage periods and ensure that you have enough resources during high usage periods.

4. Spot instances: Use spot instances, which allow you to bid on spare capacity at a lower price, this can help you save money on compute resources.

5. Cost Management tools: Utilize cost management tools provided by the cloud provider to monitor and analyze your costs, identify areas where you can optimize, and set up alerts for cost thresholds.

6. Optimize data storage: Use cost-effective storage options, such as infrequent access storage and data archiving, to reduce storage costs.

7. Use Cloud cost optimization services: Consider using third-party cloud cost optimization services that can help you identify and optimize areas of high cost.

8. Regularly review your costs: Regularly review your cloud costs and usage to ensure that you are not overspending and to identify areas for further optimization.

9. Optimize Data transfer: Optimize data transfer by compressing and deduplicating data before transferring it to the cloud.

10. Leverage Cloud Cost allocation: Use cost allocation tags to help you identify and allocate costs by department, project, or other relevant criteria.

Managing cloud budgets can be challenging, especially as prices continue to rise. However, by implementing cost-saving strategies such as right-sizing, utilizing reserved instances, auto-scaling, spot instances, and utilizing cost management tools, organizations can reduce their cloud spending by an average of 30-40%.

Additionally, by optimizing data storage, using cloud cost optimization services and regularly reviewing costs, organizations can save an additional 20-30% on cloud storage costs. By incorporating these strategies, organizations can not only save money, but also ensure that they are using cloud resources efficiently and effectively.

As a data analytics services company, we believe in building the right enterprise data foundation which is building the right cloud architecture that leads to exponential value for your enterprise data. With our cloud offerings, uncover these lasting benefits for your enterprise cloud platform such as:

1. Reduced cost & increased security

2. Improved performance and scalability

3. Easier troubleshooting and maintenance

4. Improved disaster recovery and high availability

5. Better compliance with regulations and standards

Connect with our Cloud experts today to get started!