Cost Management...and Beyond!

02.08.17
The Cloudologist

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The last Cloudologist blog looked at what cloudology is, and what a cloudologist does. Now it’s time to deliver on the promise of bringing you “insights, answers…and maybe even a spin you weren’t expecting.”

Folks, it’s time to talk about cost management.

Cost isn’t exactly the redheaded stepchild of the cloud world. Far from it! Press, analysts, current cloud users and industry pundits alike can’t seem to stop talking about cloud cost: What causes it to spike? How do you track it? Forecast it? Set budgets and enforce accountability? Make sense of complex billing rules? What are the best tools for managing cloud spend? Is there a way to efficiently purchase and manage Reserved Instances?

Now, these are all crucial questions…but there’s a larger picture that’s often overlooked. I’m not saying that cost management is overhyped – public cloud spend is often the biggest expense on an income statement, and anyone spending that kind of money wants to see it pay off. If you’re spending hundreds of thousands (or millions) of dollars a month, even a 5% decrease goes a long way.

Cost management is a vital component of any business cloud strategy, but cost is about more than just dollars and cents. If we were going to think of cost as an equation, it might look something like this:

Or even this:

 

CloudHealth_Cloudologist cost management

"If you’re spending hundreds of thousands (or millions) of dollars a month, even a 5% decrease goes a long way. Cost management is a vital component of any business cloud strategy, but cost is about more than just dollars and cents."

Clouds are sprawling ecosystems of endlessly interconnected components – nothing stands alone. Usage drives cost. Workload requirements drive usage. Performance hinges on a bevvy of factors, including availability, reliability, and security.

Consider resources like time, for instance. A wise man once said, time is money. It's easy to lose sight of the fact that time and money are highly interconnected in the cloud. But since the primary driver that likely brought you to the cloud is the agility it brings your organization, it's important to realize that agility -- or lack thereof -- has a cost too. So as you drive cloud adoption and scale your usage, it's important to adopt processes and methodologies that continue to enable you to harness the agility without imposing undue overhead on you and your team. Too often I see organizations hit a cloud wall when scaling their usage, as their ability to manage secure and optimized infrastructure can no longer keep pace with their usage. This is why I recommend the adoption early of a centralized governance role to drive the standardization and optimization of cloud applications, services and infrastructure. Lightweight centralized governance will help drive faster decision-making, simplify day-to-day operations, and enable team members to focus on their core responsibilities – namely, adding business value. Lightweight governance can be fully automated over time, allowing for the automated implementation of best practices with your cloud environments. Usage is another great example of an area that impacts cost. Do you have underutilized resources or assets? Provisioning the correct assets for workloads ensures you aren’t leaving money on the table. Similarly, rightsizing infrastructure helps you know when to downgrade to a less expensive offering.

Cloud cost cuts across many key factors: speed, agility, flexibility, resource availability, risk management…the list goes on. Optimize cost, and you lay the groundwork for a successful cloud deployment that’s a business driver, not inhibitor, regardless of scale. So don’t just ask, “How can I better manage cost?” Instead, ask “What can I do to optimize my cloud, maximize my return on investment and, ultimately, build a better business?”

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