- Point of view
Controlling the cost of cloud
How to act with agility without breaking the bank
Under pressure from COVID-19, many enterprises are frantically developing virtual operations for employees and online experiences for customers. Cloud-native applications give businesses the agility they need to meet customer and employee expectations, which is also why legacy on-premise applications are migrating to and modernizing in the cloud. As a result, cloud usage is rising dramatically.
Though on-premise applications traditionally operate within a fixed capital expenditure model, organizations adopt a pay-as-you-go operating expenditures (OpEx) model for cloud. However, if you're not careful, this occasional spending can quickly become overspending, also known as cloud sprawl.
The benefit of an OpEx model is that you can readily adopt, adapt, and scale applications as the needs of your business, employees, or customer evolve. So, instead of avoiding an OpEx model, you need to know how to control it.
Overspending on cloud, or cloud sprawl, is a challenge shared by many enterprisesregardless of their maturity and experience with cloud technology. In fact, a survey of 750 global cloud decision makers found that 56% would rank understanding cost implications of licenses as their top cloud software-related challenge.1 The survey respondents also reported to being over their budgets by an average of 23%, and that they'll likely even increase spending by 47% over the next year.
Understandably, many enterprises are anxious about the growing costs. To continue to provide the cloud services employees and customers want and need in an increasingly remote world, they must recognize and control the causes of cloud sprawl.
From our work helping global businesses manage and optimize cloud solutions, we've found that the following are the four major causes of overspending:
Now that you know the common causes of cloud sprawl, let's look at some ways to control it. Perhaps unsurprisingly, it's all hinges on visibility:
So what does this look like in practice? We helped an oil and gas company rearchitect and migrate its on-premise quality control applications into a cloud-based microservices system and tracked current and future costs every step of the way. This gave the company the confidence to develop an intuitive, cloud-based experience for employees at scale in a matter of months. Because our world is continually changing, this kind of agility is increasingly important to keeping pace with your competition.
As cloud usage continues to rise, every enterprise needs to control the associated costs. If you need help with this task, look for a partner that can give you real-time monitoring of service usage and cloud spend, along with reports and tools for cost optimization. Then, your employees and customers can continue to reap the full benefits of cloud – reliability, scalability, and exceptional user experience to name a few – within budget.
Also, because Amazon Web Services (AWS) is a major cloud player, make sure that your cloud partner has an advanced partnership with AWS. For example, if a Genpact client needs to migrate an application to the cloud, we can directly engage with AWS solution architects to agree on a project plan and outline associated costs.
Just as cloud computing is transforming the way businesses run, it's also transforming the way businesses manage spending. You need to act now to prevent cloud sprawl from a pay-as-you-go OpEx model. When the costs are under control, you can begin to explore and enjoy the endless possibilities of cloud technology and prepare for a new normal with confidence.
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