Cloud cost management (also known as cloud cost optimization) is the organizational planning that allows an enterprise to understand and manage the costs and needs associated with its cloud technology. In particular, this means finding cost-effective ways to maximize cloud usage and efficiency.
As cloud infrastructure becomes more complex, cloud costs become more opaque and difficult to track. The “pay for what you use” model used by most public cloud providers adds to the difficulty: If usage is monitored and managed appropriately, this model can result in a significant savings, but it’s also easy for costs to spiral out of control. This is doubly true if decision making is decentralized across an organization, with individuals able to spin up instances (and accrue costs) with little or no accountability. Thus, it’s important for enterprises to employ a cloud cost management strategy to make the most of their infrastructure and keep costs down.
There are many factors that contribute to cloud costs, and not all of them are obvious upfront. Costs can include:
A strong cloud cost management strategy must take all these factors into account.
Cloud costs are constantly shifting, and decision-making is often decentralized in large organizations, making visibility into expenses difficult. Rapid scalability is one of cloud computing’s major strengths, but it also makes it easy for IT staff to spin up services without considering the cost. Implementing a cloud cost management strategy can help an organization plan for future costs and consumption.
For companies that use multi-cloud combinations, it’s also important to practice effective multi-cloud cost management that takes the costs of several different public cloud providers into account. With a better understanding of costs and usage, a business can more effectively enforce accountability across the company and improve the performance and efficiency of its cloud technology.
Cloud spending is increasing, and a lack of insight into costs can have considerable financial consequences. The potential results of a lack of proper cloud cost management can include an unexpected spike in costs, overpaying for unused resources, or even inadequate performance.
There are a number of strategies businesses can use to manage cloud costs. Some of these include:
Cloud cost management helps businesses control their spending on cloud services while also maximizing their resources. Most cloud providers offer basic cloud cost management tools to help achieve this, and there are also more specialized third-party solutions that provide additional visibility and insight into cloud costs. By making cloud cost management a priority, an enterprise can control its costs and practice good governance while also ensuring that it has the cloud resources it needs to stay competitive.
In addition, cloud cost management best practices also support other business objectives and cloud best practices, such as security, visibility, organization, and accountability. Thus, cloud cost management is important for reasons beyond simple cost control. In particular, good cloud cost management gives businesses the ability to plan for the future, reduce waste, and forecast both their costs and their resource needs.