DevOps.com

  • Latest
    • Articles
    • Features
    • Most Read
    • News
    • News Releases
  • Topics
    • AI
    • Continuous Delivery
    • Continuous Testing
    • Cloud
    • Culture
    • DataOps
    • DevSecOps
    • Enterprise DevOps
    • Leadership Suite
    • DevOps Practice
    • ROELBOB
    • DevOps Toolbox
    • IT as Code
  • Videos/Podcasts
    • Techstrong.tv Podcast
    • Techstrong.tv - Twitch
    • DevOps Unbound
  • Webinars
    • Upcoming
    • Calendar View
    • On-Demand Webinars
  • Library
  • Events
    • Upcoming Events
    • Calendar View
    • On-Demand Events
  • Sponsored Content
  • Related Sites
    • Techstrong Group
    • Cloud Native Now
    • Security Boulevard
    • Techstrong Research
    • DevOps Chat
    • DevOps Dozen
    • DevOps TV
    • Techstrong TV
    • Techstrong.tv Podcast
    • Techstrong.tv - Twitch
  • Media Kit
  • About
  • Sponsor
  • AI
  • Cloud
  • CI/CD
  • Continuous Testing
  • DataOps
  • DevSecOps
  • DevOps Onramp
  • Platform Engineering
  • Sustainability
  • Low-Code/No-Code
  • IT as Code
  • More
    • Application Performance Management/Monitoring
    • Culture
    • Enterprise DevOps
    • ROELBOB
Hot Topics
  • Why You Need a Multi-Cloud and Multi-Region Deployment Strategy
  • Cloud Drift Detection With Policy-as-Code
  • Checkmarx Brings Generative AI to SAST and IaC Security Tools
  • Linux Foundation Europe to Host RISE Open Source Project
  • I Guess This is Growing Up: Devs and CISA’s Secure-by-Design Guidelines

Home » Blogs » How to Respond to Rising Cloud Costs

How to Respond to Rising Cloud Costs

Avatar photoBy: Bill Doerrfeld on March 1, 2021 1 Comment

As organizations ascend to the cloud, their cloud expenses are floating to the same lofty heights. But are all cloud costs necessary? The answer is a resounding no — there’s a lot of waste.

In 2020, organizations wasted $17.6 billion on idle cloud resources and cloud overspending, according to ParkMyCloud. Data egress, upgrades and subscriptions to SaaS tools also crowded the cloud invoice inbox. With digital innovation a pressing concern, cloud spend is forecasted to rise significantly in the coming years. Without the right fiscal discipline in place, companies face escalating fees.

TechStrong Con 2023Sponsorships Available

I recently met with Eugene Khvostov, VP of product management at Apptio, to discover how organizations can rein in cloud and SaaS spending. According to Khvostov, IT departments require increased visibility, optimization and responsibility if they are to curb the cloud checkbook. Below, we’ll see what he means and discover useful tips for reducing unnecessary expenditures. Following these general guidelines could help right-size your cloud offerings across AWS, GCP, Azure and other cloud-based tools.

Where We Are With Cloud Costs

The pandemic has ushered in significant growth in the cloud computing and SaaS space. We’re also seeing a multi-cloud fracturing effect, as cloud service providers like GCP and Azure reach parity with AWS offerings.

Cloud tooling grants extraordinary flexibility, elasticity and scalability. Being able to spin up or wind down an instance on a whim has permanently altered how software architecture is built. Yet, with great cloud power, comes great responsibility. “How do I make sure I’m not wasting money in the cloud?” Khvostov asked.

According to Khvostov, as more organizations move to hybrid and decentralized multi-cloud models, more and more questions arise: What is the total cost per service? Who is spending what? Is cloud spend actually driving growth, and, if so, how much? How are new tools being procured?

Three Cloud Financial Management Strategies

To address these concerns and plan for cloud spending increases, Khvostov recommended three general strategies. These three phases can be thought of as research, remediation and prevention.

1. Access and Visibility

“You’ve got to have access and visibility,” said Khvostov.

First, companies require access to their spending data. In this case, large, general invoices are not granular enough. You need breakdowns by service, said Khvostov, to access more fine-grained spending habits.

Second, you need to equate those spending habits to team usage. This requires improved visibility into your organizational structure and service usage tracking at a team-by-team level.

2. Optimize

Next comes optimization. Ensure cloud footprints are appropriately sized for each application, and ensure you don’t have any idle resources, Khvostov said.

Where do you have the opportunity to optimize? Well, it could be as simple as shuttering an orphaned volume, such as an Amazon Elastic Block Store (EBS), which could persist even after an EC2 instance is terminated.

“BS volumes tend to persist unless you select the Delete on Termination,” AWS explained. So, check your configurations. Amazon provides a way to detect this using OpsCenter.

3. Responsibility

Once things are optimized, you need to maintain standards. “You must ensure teams drive responsibility for spend management and optimization,” said Khvostov.

But how do you instill an optimization mindset and empower engineers to take action? Khvostov said it’s all about demonstrating a measurable return on investment (ROI) and continuing discussions between stakeholders.

A recent report from A Cloud Guru found that 90% of organizations plan to expand their cloud services over the next one to three years, but 44% lack a plan to upskill their workforce. Most groups have their work cut out for them if they are to assign accountability for cloud costs ownership.

Specific Cloud Costs That Bite

So, what are some other particular areas we should be watching? Well, arguably, the most common cost is hidden data transfer fees. Surprise ingress and egress fees can be costly — take the story of Chris Short, whose personal site was charged $2700 for an unexpected 30.6 TB data transfer.

Watch out for other cloud costs around:

  • Services automatically launching or autoscaling.
  • Idle resources due to “orphan” instances or overprovisioning.
  • Price lock on granular commitments. You could be stuck in a savings plan on an Amazon EC2 R5 instance, which would be lost upon upgrade to R6. (Khvostov acknowledged that AWS has remedied this situation, to an extent).
  • Legacy, less-efficient code can rack up cloud costs, The Information reports.

The Cloud Economist Role Is Trending

To unearth these costs, some believe a brand new role is required. A cloud economist is a cloud financial manager that helps spot fees, directs further cloud optimizations and calculates overall ROI from cloud investments.

The rise of cloud financial offers is an accelerating trend, Khvostov said, one that requires the right tools and practices within an organization to become a trusted ally. “It’s definitely a legitimate role in the sense that it’s critical to organizations,” said Khvostov. “It’s specialized enough that it requires technical and financial skills.”

Hiring a cloud economist, or building a cloud financial center of excellence, could provide a lot of value. Yet, gauging the ROI of this role isn’t immediately obvious. Some optimizations could take time to visualize, Khvostov said. A certain change could instantly invoke 20% cost savings, but you may not register that impact for 30 days or more.

“It’s not just about cloud infrastructure — it’s about your SaaS spend, as well,” Khvostov added. He believes companies desperately need a window into what infrastructure-as-a-service (IaaS) and automation, like Chef or Jenkins, cost, along with the time savings and dollar ROI their usage equates to — because, he said, “You can only right-size what you know.”

Trimming Cloud Spend and Cloud Costs

Some IT folks simply fail to understand the implications of their cloud resources. Surprisingly, a recent survey by SoftwareONE revealed that 30% don’t realize that everything in the cloud is metered. To rectify this knowledge gap, organizations could use better awareness into their cloud holdings.

The cloud is the future, and we must prepare responsibly. Yet, having fiscal discipline in a world where every software function is commodified “as-a-service” is tricky — teams require financial visibility into their cloud holdings. To rein in costs, Khvostov recommended treating it as a continuous process: access and visualize spending data, optimize your existing cloud footprint and disseminate responsibility among teams.

Once you have a better frame of reference, you can begin to right-size cloud, right-size SaaS and appropriately right-size the team. Eventually, with the right multi-cloud and SaaS financial management strategies, perhaps that cloud bill will start to feel a little lighter.

Recent Posts By Bill Doerrfeld
  • FinOps Foundation’s FOCUS Aims to Standardize Cloud Billing
  • What’s the Difference Between DevOps and Platform Engineering?
  • State of Developer Experience Report Finds Growing API Reliance
Avatar photo More from Bill Doerrfeld
Related Posts
  • How to Respond to Rising Cloud Costs
  • In DevOps, On-Prem Is Dead
  • JumpCloud Joins Rackspace Marketplace
    Related Categories
  • Application Performance Management/Monitoring
  • Blogs
  • Business of DevOps
  • DevOps in the Cloud
  • Features
  • Leadership Suite
    Related Topics
  • cloud costs
  • DevOps cloud
  • finance
  • IaaS
  • SaaS
Show more
Show less

Filed Under: Application Performance Management/Monitoring, Blogs, Business of DevOps, DevOps in the Cloud, Features, Leadership Suite Tagged With: cloud costs, DevOps cloud, finance, IaaS, SaaS

« How To Make a Good Decision
Too Many Organizations Get Public Cloud Wrong »

Techstrong TV – Live

Click full-screen to enable volume control
Watch latest episodes and shows

Upcoming Webinars

App-Solutely Necessary: Why Modernizing Your Apps Is A Must Hosted By The Cloudbusting Podcast Team
Thursday, June 1, 2023 - 11:00 am EDT
Confident Cloud Migrations: How A Top 5 Bank Ensured Reliability With AWS And Gremlin
Thursday, June 1, 2023 - 1:00 pm EDT
Securing Your Software Supply Chain with JFrog and AWS
Tuesday, June 6, 2023 - 1:00 pm EDT

GET THE TOP STORIES OF THE WEEK

Sponsored Content

PlatformCon 2023: This Year’s Hottest Platform Engineering Event

May 30, 2023 | Karolina Junčytė

The Google Cloud DevOps Awards: Apply Now!

January 10, 2023 | Brenna Washington

Codenotary Extends Dynamic SBOM Reach to Serverless Computing Platforms

December 9, 2022 | Mike Vizard

Why a Low-Code Platform Should Have Pro-Code Capabilities

March 24, 2021 | Andrew Manby

AWS Well-Architected Framework Elevates Agility

December 17, 2020 | JT Giri

Latest from DevOps.com

Why You Need a Multi-Cloud and Multi-Region Deployment Strategy
June 1, 2023 | Jesse Martin
Cloud Drift Detection With Policy-as-Code
June 1, 2023 | Joydip Kanjilal
Checkmarx Brings Generative AI to SAST and IaC Security Tools
May 31, 2023 | Mike Vizard
Linux Foundation Europe to Host RISE Open Source Project
May 31, 2023 | Mike Vizard
I Guess This is Growing Up: Devs and CISA’s Secure-by-Design Guidelines
May 31, 2023 | Pieter Danhieux

TSTV Podcast

On-Demand Webinars

DevOps.com Webinar ReplaysDevOps.com Webinar Replays

Most Read on DevOps.com

CDF Marries Emporous Repository to Ortelius Management Platform
May 26, 2023 | Mike Vizard
US DoJ Makes PyPI Give Up User Data ¦ Tape Storage: Not Dead
May 25, 2023 | Richi Jennings
Is Your Monitoring Strategy Scalable?
May 26, 2023 | Yoni Farin
The Metrics Disconnect Between Developers and IT Leaders
May 25, 2023 | Mike Vizard
GitLab Adds More AI and Cybersecurity Capabilities to CI/CD Platform
May 26, 2023 | Mike Vizard
  • Home
  • About DevOps.com
  • Meet our Authors
  • Write for DevOps.com
  • Media Kit
  • Sponsor Info
  • Copyright
  • TOS
  • Privacy Policy

Powered by Techstrong Group, Inc.

© 2023 ·Techstrong Group, Inc.All rights reserved.