By Simon Heath
Imagine heading to work with almost no idea how much money was going to flood out the door from your cloud operations that day. It could be $1,000…$10,000… $1 million? Nervously, you open an email with a 400GB bill attached. The bill has thousands and thousands of SKU items, and at the end is one enormous number. You stare at the number wondering, How did they calculate this? How is it so different to last month? And – feeling slightly sick at the thought – what is it going to be next month? How do I get a handle on these costs? If this sounds familiar, chances are you’ve got an out-of-control cloud cost problem.
Ah, the cloud. Remember that powerful tool enabling your business to evolve and transform in incredible ways? The one they said only charges you for what you use? Well, it turns out you might be using it in ways you never predicted and judging by the lines of incomprehensible codes, you might need some help figuring out how to recalibrate.
A game-changer for IT operations
Cloud computing is undoubtedly a global game-changer. Rather than run software applications downloaded on physical servers, businesses can now access those same programs through the internet, from anywhere. This global transformation in how businesses operate is accelerating, and cloud computing is expected to grow at 5X the current rates, with $1.3 trillion in IT spending affected by the shift to the cloud by 2022. And it makes sense. From accelerating innovation, de-risking data loss, to rapidly increasing and decreasing your IT needs without acquiring masses of equipment, the cloud is an exciting and compelling tool that all businesses should leverage.
And, to the delight of finance teams everywhere, it was meant to mean cost-saving! The advent of the cloud saw a seismic shift in business architecture, but it also saw a sharp change in who controlled the purse strings.
The IT rubber stamp
The way that cloud infrastructure and software are deployed is completely different from the world of on-premise data centers. Where once the procurement model meant static assets were accounted for, cloud-spending is completely variable. The micro-optimisations and the decisions made from real-time data happen at the team level each and every day. As such, engineers have assumed the role of procurement, and are making wide-ranging purchasing decisions about new features without the scrutiny of finance teams or executives. The complexity of the new features, the fluidity of the pricing models and the siloed nature of the IT decision-making has left business executives and finance teams staring horrified at astronomical cloud computing bills because their IT teams are often working in a procurement vacuum.
A recent survey from 451 Group, Cost Management in the Cloud Age, found:
85 percent of CIOs acknowledged overspending their cloud budgets, and
82 percent said they have no visibility into cloud costs or are forced to rely on spreadsheets, manual tracking or cloud vendor portals.
A Cloud FinOps recalibration
Outdated procurement models and financial reporting techniques force some companies to buckle under the weight of their cloud computing bill. When IT teams think and operate within a CapEx mindset, it becomes incredibly difficult to control cloud costs. Over the years, we’ve watched companies struggle to bring cloud spend under control and get all business functions on the same page. That’s why, at SXiQ, we’ve designed penetrating new ways to help companies improve their OpEX management and rearchitect their platforms and applications so the cloud can start to work on their terms, immediately.
You may have already heard of FinOps, an emerging practice that brings together the technology, business, and finance departments to operate smoothly in a world where costs vary with consumption. While powerful, FinOps processes can often take months to build, and we understand you probably don’t have that kind of time. So SXiQ has developed a series of immediate consults that can reduce your cloud bill rapidly and get some quick wins on the board.
Rather than wait six months before a complete FinOps strategy is rolled out, we begin stripping out unnecessary costs straight away, painting a complete picture of your cloud usage and directly relieving some of the bill-shock. Our Cloud Architects work closely with business stakeholders to understand how each application is using cloud resources. If needed, we can re-architect those applications if they’re chewing inefficiently through your cloud deployment, and adopt new architectural patterns like containerisation.
For those who have been staring numbly at out-of-control cloud spending, the opportunity to rapidly get savings, relieve pressure and open up funding can save over 20 percent of your monthly spend in the first eight weeks.
Drop us a line here, and challenge us to make big savings off your cloud costs.