The Top Three Cloud Cost Management Challenges … and How to Solve Them

April 30 Blog

We were told the cloud was supposed to be a miracle technology – a way to access and use information and solutions across organizations, between organizations, across platforms and devices, across the world. And in many ways, it’s delivered. But it has also introduced challenges we couldn’t have predicted – challenges we’re still discovering and learning how to solve.

 

The thing is, many of these challenges are hidden. You don’t recognize you have a problem until your IT bills start skyrocketing and you have to backtrack to figure out where you’re overspending. Or in some cases, unless you know what to look for, you might not even realize you’re overspending at all.


 

Want to save yourself from years and years of blowing unnecessary money on SaaS, PaaS and Iaas? Here are the top three cloud cost management challenges most organizations run into … and tips on how to keep them from getting the best of your budget.

 

1. Keeping up-to-date on usage so you can accurately forecast spending.

Waiting around for an invoice from a large cloud provider is just asking for trouble. It’s important to know your spend as it occurs, so you can identify overuse as well as underutilized accounts that could be scaled back. Using management tools that integrate with your software subscriptions will give you the most current usage and spend data, so you can keep track of where you could be saving money, and where you could avoid being charged for overuse.

 

2. Renewing subscriptions to reflect your company’s licensing needs.

Many organizations let cloud subscriptions auto-renew without considering how their needs and the market’s offerings have changed since the initial contract was signed. But just because the budget is already allocated doesn’t mean it’s being spent wisely. You can use contract renewals to your advantage and make sure your current cloud subscriptions are still working for you by carefully reviewing your licensing agreement, checking your historical usage data (which will depend on whether you’re licensed per user or based on total consumption) and comparing it with your vendor’s current offerings. Check out their most current pricing models, ask to eliminate any add-on services or user licenses you no longer need, and negotiate for a new licensing agreement that matches your current and projected usage.

 

3. Recognizing underused subscriptions to eliminate waste.

Many cloud services offer a variety of functions beyond their core benefits. For example, an Amazon Prime subscription also offers unlimited photo storage. Is your organization paying for Dropbox to store photos, and ignoring the same functionality in the Amazon subscription? Identify the subscriptions that have overlapping functionality and keep only those that best fit your company’s needs. Then, work to identify legacy subscriptions – those that were purchased long ago and are just kept around out of convenience but are no longer relevant. Then, go through the individual licenses within each subscription and reassign those that are unused due to employee turnover and inhouse transfers.

 

There’s no denying cloud is the future. Organizations that began moving operations to the cloud early on can ultimately function with more agility and more efficiency than those that were apprehensive about adapting. However, spending time uncovering the ways in which your organization operates in the cloud will set you up for success as the technology and your organization continue to scale.