CIOs beware – do you know how much money your organisation is wasting in the cloud?

Cloud adoption has risen dramatically over the last few years. While it’s easy to see why moving infrastructure to the cloud is appealing, with advantages such as greater accessibility, cost savings and greater storage capacity, organisations need to be aware that using the cloud incorrectly can have its pitfalls.

What many businesses don’t realise is how easy it is to waste money in the cloud. Cloud usage costs are based on what you provision, which can become a costly exercise as many organisations fail in the planning process.

This can range from opting for too much robustness, to saving backups for too long, or simply forgetting to use what you’ve paid for. We’ve come across many organisations that are wasting 10 to 35 per cent of their cloud spend on unused or over-provisioned cloud services, which can account for hundreds of thousands or millions of dollars a year.

Gartner expects the global and local public cloud markets to continue to grow throughout 2017. The researcher has predicted that Australia's cloud market will reach A$6.5 billion, up 15 per cent from 2016, predominantly due to a boom in software-as-a-service adoption. Worldwide, this figure will jump by 18 per cent to reach US$246.8 billion.

Many organisations that are moving from data centres to the cloud don’t give much thought in advance about wastage as the cloud usage model differs from the traditional data centre provisioning model. They only realise they’ve wasted thousands or millions of dollars when it’s too late. This wastage could sound the death knell for many a CIO, and it’s becoming obvious that cloud strategies need to be planned well in advance.

Tips on reining in your cloud spend

How can you maximise your cloud IT investment? Below are three tips that can help you to navigate your cloud usage and avoid wastage:

1. Backups

We all know backups are important, especially since the number of outages have increased in frequency and severity over the years. Assurance and predictability is key to any organisation. The biggest downfall to being in the cloud is the lack of useful visibility of what you’re paying for, and the value you’re getting for it. Many organisations often don’t think about physical limitations or costs when they migrate to the cloud which can be a very costly mistake.

To overcome this, you need to understand how much you’re spending on services like backups, and whether that spend is actually required. Depending on the sector you’re in, you’ll find that you may not be required to store backups from five years ago, therefore consider keeping backups from a few weeks to six months, depending on your needs.

Rotating and deleting backups when they’re old is another key to keeping your costs down as the cloud gives organisations the ability to store petabytes of information, it’s also a good idea to keep your cloud cost capped rather than leaving it open.

2. Stay on top of dynamic service updates

Cloud providers like AWS frequently release new generations of compute instances (aka versions) which will cost organisations less money for better performance.

However, unlike software providers, many cloud providers don’t offer automatic updates to these new compute instances, which can leave organisations in the lurch in terms of cost and delivery. You can use tools to monitor the availability of these updates and ensure you are running the latest versions, which will help you bring down costs and improve performance. In my experience, the cost of upgrading to new compute instances as opposed to not upgrading, far outweighs the benefits in the long-run.

3. Robustness

When organisations first venture into the cloud, many tend to opt for a high level of robustness which include anything from encryption to disaster recovery; however, is this always necessary? For many organisations, the reality is that the production work they do only accounts for 30 to 40 percent of their total spend. Therefore, opting for high robustness across your infrastructure which will cost twice as much and is not required for the whole business, will mean a significant waste in your budget.

Often, inexperience and not understanding the true cost impact is the underlying reason why organisations select a high level of robustness. You don’t need a test server or your development database to achieve high availability, just one that’s adequate and sufficient to meet your needs.

Efficient cloud spend is to tailor the amount of availability required, while having visibility of your needs. Don’t take the default option and select everything on the menu. Rather, tailor and plan your cloud needs to the level that you require for your organisation.

It’s important to get your cloud strategy right from the start, by engaging experts and taking advantage of cloud cost and compliance tools that will help you monitor your usage and provide real-time visibility to your cloud requirements. These small steps can enable you to potentially save your organisation a significant amount of money in the long run.

Dave Slutzkin is general manager at Stax.