How To Manage Your Cloud Procurement & Costs

After discussing in some previous articles about cloud readiness and the most common challenges when moving to the cloud I’d now like to tackle another pain point that is related to cloud and occurs after organizations make the move. That is how organizations should manage their cloud procurement and costs.

Though in most circumstances the public cloud provides better value for money than on-premise technology, without proper control, cloud spend can turn into a financial nightmare.

Most cloud platforms run a pay-as-you-go model and with the possibility to add licenses just by clicking you risk getting your cloud costs out of your hand very easily. How do you ensure you are not purchasing anything unnecessary?

Don't pay for services you don't need any longer. Instead, use analytics to predict what you'll be spending on cloud. You might have unused licenses (i.e user subscriptions available due to employee leaving the company) or you could use an alternative product that is cheaper.

Another challenge for larger organization is dividing the costs and registering the orders and invoices to the subsidiaries. Identify what you have and who owns it. Tagging resources with user ownership will give you a better handle on where the spend originates.

If your organization doesn’t have a centralized cloud spend and no clear overview of its up-to-date status of cloud services and licenses it is very hard to make informed decisions regarding new purchases.

Cloud spend management is not a one-and-done process. In order to really reduce your costs by using cloud, you should identify waste by uncovering inefficient use of cloud resources and budget overruns.

Then, you need to put in place systems and processes to monitor your spending and design your applications to take advantage of the cloud cost model. Once you have a clear view of what your spend is, set budgets per account and make them visible to you teams. Doing this you will ensure they are aware of what they are spending, and they take responsibility in managing the budgets. It’s easy to get carried away spinning up services when you don’t have the burden of the bills on your shoulders.

Prevent staff from provisioning unapproved virtual instances from the marketplace that include software license costs, or from purchasing services from vendors with whom you do not have enterprise agreements in place or are too costly to run at scale.

Create a schedule for your instances for when to start and stop and if possible, shut down environments on nights and weekends. Doing this will help you save on runtime costs.

Having a comprehensive picture of your cloud spend and a strong governance with practices and policies in place will help you avoid unnecessary bills and will make it easier to reach your goal of optimizing costs.

All the above might seem hard to achieve or time consuming but you don’t have to do it by yourself. Many organizations decide that tackling these cost optimization chores on their own takes too much time and expert skills. You can always reach out to a firm specialized in cloud and license cost management such as Crayon. On top of skills and knowledge, Crayon has its own platform for cloud procurement and spend control – Cloud iQ. With the portal, you can procure the exact number of user - and consumption-based cloud services from different publishers that you need. Cloud-iQ gives an exhaustive view of your license assets, exhaustive reports on usage, real-time cloud service provisioning and implementation and cloud service invoicing with detailed itemisations.

If you want to know more on how to better manage your cloud procurement and spend contact us: +201220617527