Inflating Cloud Costs

Public cloud Costs service providers at the end of 2017 announced their revenue for the 3rd quarter. Income figures are impressive for their size and growth rate. The three big companies (Amazon Web Services, Microsoft Azure, and Google Cloud Platform) combined revenues of $7.5 billion in the third quarter, or $30 billion annualized.

Cloud migration consulting services specialists wondered how much cloud provider revenue comes from tenants who don’t understand how they could prevent wastage in total cloud computing spending. Earlier in the RightScale 2017 State of the Cloud Report, it was noted that cloud computing users believe that overhead costs are as high as 30 percent of cloud spending. In fact, it is likely that this figure is even higher.

In fact, 60 cloud cost optimization preliminary assessments that were completed for RightScale customers were reviewed before optimization activities were initiated. It has been found that the average loss in cloud costs is 35 percent. This equates to a loss of up to $10 billion in AWS, Azure, and Google costs annually. The number is likely to rise over the next year as the pace of cloud adoption accelerates. In such circumstances, IT professionals need to identify unnecessary costs and take the necessary measures in order to save and optimize costs.

Cloud Cost Optimization Delivers Instant Savings

First of all, we need to recognize that overhead in IT is not a new problem. For decades, we’ve been buying data center infrastructure months or even years before we actually need it at this scale. And with the introduction of virtualization, companies continue to deploy virtual machines, usually with more resources than they really need, and often leave them on even when they’re not in use for long periods of time.

However, the incentive to improve the efficiency of virtualized environments is somewhat higher, as the optimization benefit seems to be less tangible when the hardware is already purchased and paid for in full.

The difference with the public cloud is that resource optimization starts making money right away. The moment you turn off a resource or reduce the amount of resources consumed, you will no longer pay for the excess and at the end of the month the cloud bill will be lower. So now you have the motivation to save money and the opportunity to get almost instant gratification when you do.

3 Factors Inflating Cloud Costs

There are three factors that in some cases lead to the formation of losses in the composition of cloud costs:

· complexity of pricing and billing of cloud computing,

· constant change in prices and product portfolio of cloud providers and

·         decentralization when using the cloud.

Cloud Computing Cost Management and Optimization

Organizations adopting the cloud are quickly realizing that they need to learn how to manage the cost of cloud services. Enterprises that already use the cloud extensively are looking to optimize costs and use automated policies to keep costs under control. Devops as a services uses reports and controls to help prevent loss before it happens.