Access and Feeds

Enterprise IT: The Unexpected Costs of the Cloud

By Dick Weisinger

The cloud is great. Except when the cost to use it isn’t.

Understanding and controlling cloud costs can be extremely challenging, especially for businesses when first moving from on-premise to the cloud.

The cloud makes so many things easier to do. And it’s super flexible. But without careful planning, it becomes very easy to quickly burn through a lot of money when using the cloud. A lot of the mismatch of the actual cost with expected spending has to do with the improper sizing and tracking of cloud resources. Overprovisioning of resources is a common problem — ie., allocating and spinning up too many resources, or choosing resources that are more powerful than what is really needed. Or spinning up servers and forgetting to turn them off when they’re not in use.

Jennifer Hays, senior vice president at Fidelity Investments, told CIO that “the cloud model defies traditional business methods of controlling costs. In most traditional companies, you have silos between engineering, finance, and procurement, and they balance one another and control the budget. The cloud turns it completely on its head. Fundamentally, it is the different consumption models that complicate our reality. This decentralized model really changes all of the behaviors and processes established to control costs.”

Alex Woodie, the managing editor at Datanami, wrote that “don’t lay the blame for this situation on AWS, Microsoft Azure, or Google Cloud. It’s clearly not in the interests of those companies to figure out how to reduce what you spend with them. They are for-profit entities, at the end of the day. It’s not their fault that you can’t restrain your engineers from spinning up 1,000-node clusters with just a few clicks of a mouse and a 16-digit credit card. Besides, the problem spans multiple clouds.”

If it is any consolation, David Linthicum, chief cloud strategy officer at Deloitte, said that “using the public cloud was never about ops savings—at least, it never should have been. The core value of the cloud is and has always been, improved speed of change. Speed to change applications and data, as well as to build and remove core business systems.”

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