Cloud KPIs You Need to Measure Success

4 Min Read

We’ve worked with thousands of organizations around the world at all different stages of their cloud journey and have identified patterns and best practices for mature cloud management. We found that the most successful organizations are benchmarking and tracking their progress—at each stage of the cloud maturity model—to monitor success. 

KPIs to Measure Cloud Visibility

A typical cloud journey begins with addressing challenges around visibility and controlling costs. Without visibility across all of your clouds, broken down by business groups, applications, or users, it’s almost impossible to take next steps to improve governance and start automating processes. 
 
Because cloud visibility spans cost, usage, performance, configuration, security, and availability, we’ve compiled different example KPIs your organization should be tracking: 

  • Cost of all untagged resources ($)
  • Percent of environment with proper tagging in place (%)
  • Percent of total bill charged back (%)
  • Variance of budget vs. actual by application or team (%) 
  • Forecast accuracy (%)
  • Security incident per month by team (n)
  • Security vulnerabilities identified per month per team (n)
  • Mean time for vulnerability announced to all systems patched (n)

Learn more best practices for improving cloud visibility in our blog.

KPIs to Measure Cloud Optimization

Optimization is the process of finding opportunities to be more efficient and reduce spend or save time, without sacrificing functionality or required resources needed to meet your broader business objectives. While mature organizations might already have robust cloud cost optimization practices (e.g. rightsizing, elimination of zombie infrastructure, reservation management, etc.), optimization isn’t just about cost. 

Operational optimization involves finding opportunities to be faster and more efficient at day-to-day tasks, and security optimization is the process of proactively monitoring and suggesting remediation of security and compliance risks. 

Here are KPIs your organization should be monitoring to measure optimization across teams and functional areas: 

  • Percentage of infrastructure running ‘on-demand’ (vs. covered by Reservation, Savings Plan, Committed Use Discount, etc.) (%)
  • Rightsizing savings (%)
  • Effective cost per resource (i.e., $/compute hour) ($)
  • Production incidents by application/team (n)
  • Reverted deploys (%)
  • Mean time to repair or mean time between failures (time)
  • Number of security lapses (open ports, IAM failures, etc.) (n)
  • Number of assets that don’t meet configuration standards (wrong VM type, location, image, OS, tagging) (n)

The key to success in this phase is to motivate and incentivize teams to follow optimization best practices. To see what success looks like, listen to Intuit's cloud optimization tactics and results.

KPIs to Measure Cloud Governance and Automation

Governance is the process of defining best practices and then getting notified (or taking action) when infrastructure is out of compliance or has ‘drifted.' Cloud governance policies can be implemented in a few different ways (e.g. in-band vs. out-of-band, guidelines vs. guardrails). You can see more on building cloud governance policies here.

When first getting started, most organizations break down governance and automation into three focus areas: financial management governance, operational governance, and security and compliance governance. Here are some example KPIs: 

  • Percent of policies in compliant state (%)
  • Cost optimized over time ($)
  • Cost optimized per policy over time ($)
  • Time saved as a result of policies (time)
  • Number of reservations automated (n)
  • Time to remediate security violations (time)
  • Service availability (%)
  • Time to deployment (time)

For more insight into cloud governance, why it’s important, and how to enforce it, check out our Cloud Governance blog series.

KPIs to Measure Business Integration

At this phase, you’ve already gained visibility into all your cloud environments, are continually optimizing, have well-defined and automated governance policies, and are consistently monitoring KPIs to ensure long-term success.

The last step is to integrate your cloud process into business processes so everyone is working towards a common goal. This final phase of cloud maturity can seem a bit broad and abstract, so we’ve compiled a few best practices for your multicloud business integration process here

Here are some examples of KPIs to ensure your cloud strategy and business strategy are aligned: 

  • Cost per customer ($)
  • Cloud spend as a percentage of revenue (%)
  • Reduction in Cost of Goods Sold (COGS) over time (%)
  • Cost of revenue over time ($)
  • TIme to bring new services to market (time) 
  • Compliance issues open (n)
  • Mean time to detect (time) 
  • Customer satisfaction (typically using Net Promoter Score)

Using KPIs to Benchmark Your Cloud Maturity

Whether you’re just starting out on your cloud journey and are focused on improving visibility across your clouds, or you just finished automating processes and are figuring out how to align your cloud and business goals, it’s important to think about KPIs. 

Establish KPIs early, and be sure you’re circling back to review these metrics periodically to track your progress over time. Benchmark against yourself—or better yet, benchmark against your peers—so you can show which actions are having the greatest impact. 

Take a deeper dive into the cloud maturity model and learn best practices for each phase of the framework in our whitepaper, Benchmark Your Cloud Maturity: A Framework for Best Practices.

Image
BETTER Headshot Jackson Lucas
Jackson Lucas, Cloud Tech Journalist

Jackson is an avid storyteller and currently reports on cloud industry news, documents cloud best practices, and helps organizations tackle their biggest cloud management challenges. While you may know him for his contributions to the CloudHealth blog, Jackson also focuses on retelling VMware's complex product narratives, and has written many of the webpages you see across the CloudHealth site today.

We Think You Might Like These: