How To Monitor Cloud Spending?

Monitor Cloud: It is common to hear that one of the benefits of the cloud is cost reduction. However, another joint statement also runs counter to this one: it is almost impossible to manage cloud spending. Will it be?

Perhaps this is based on the fact, quite actual, that many organizations that migrate to the cloud are not able to achieve all the savings they were hoping for, even if they are automatically freed from expenses such as those arising from data center maintenance needs.

According to Gartner, 80% of organizations will exceed their budget for cloud IaaS due to a lack of cloud spend monitoring and cost management, and by 2024 virtually all legacy applications migrated to public cloud infrastructure will need optimization cost-effective.

The fact sounds even contradictory. First, compared to traditional data centers, whose efficient use does not automatically mean savings, cloud computing provides greater visibility into IT costs.

Secondly, today providers have different tools and technologies to help their customers manage cloud resources, with APIs that give access to account systems and the data used to calculate the value of the accounts. For multi-cloud approaches, there are also tools offered by external providers.

So, what explains such an event? Was the migration to the cloud a mistake for these organizations? According to our analysis, not the migration itself, but the migration without implementing a cloud spend management plan, which can provide immediate financial benefits.

In this post, we will better understand what makes monitoring cloud spending so tricky, how to solve such problems and prepare the ground for this monitoring, and then, of course, where to start.

Why It’s So Difficult To Monitor Cloud Spend

We claim that organizations have difficulties monitoring cloud spending, which is contradictory given the promises of savings from technology. We also say that this problem is related to a lack of monitoring of cloud spending and a lack of cost management practices.

But why does this happen? After all, problems such as errors in forecasting demand and over-provisioning to handle isolating activity peaks. The great creators of spend will replace by the possibility of scaling up and down resources. Gartner provides some explanation on this.

They Cannot Identify The Cost With The Location Of The Expense

By charge for consumption, and not all at once, organizations find it challenging to understand all the possible items. And there are many – responsible for their spending and, consequently. To make estimates and select the best price option for each item. Use case.

Hire Unnecessary Resources

The ease and security of implementing features with a few clicks, given its on-demand nature, makes unnecessary extensions familiar without prior analysis, as well as forgetting this action, which generates an average of 35% service underutilization rate. Cloud, according to Right Scale.

Many Product Options From Providers

The variety and constant change in the providers’ offerings, which add different services, functionalities, and pricing models to their product portfolio, and the consequent lack of standardization of the products of the major platforms, is another source of difficulty for organizations.

Many Combination Possibilities

Derived from the previous point comes the possibility of building the same application through several different architectures, services, and components, which also result in additional costs. Organizations find it difficult to identify all these possibilities and select the most cost-effectively.

Setting The Stage For Cloud Spend Monitoring

How do we solve such challenges? According to Gartner, contrary to what many think, cost monitoring is not just an operational. Or financial concern but a multifaceting issue, which must correlate to business KPIs. And an ROI, as well as to other teams.

For the consultancy, however, this limitation arises from the high complexity of multi-cloud environments, the increased confidence in the principles and processes derived from traditional data centers, and the difficulty of making choices that align with a cloud strategy.

Monitor Cloud Spend

The Gartner framework for monitoring and managing cloud computing spending provides:

1. Plan: define the cloud architecture based on business requirements. Choose the pricing model, forecast consumption based on the needs. And pricing models adopted, and establish the budget.
2. Track spending: Define spend metrics and identify areas that spend the most or are rapidly growing expenditures and unused resources.
3. Act on opportunities for improvement and apply cost reduction practices; identify areas to automate for monitoring and loss resolution; assess ROI.
4. Develop: adopt native tools from providers or other providers, scale-up initiatives, and correlate costs to business values.

Also Read: How To Align Your Cloud Strategy