Cloud computing has become an essential part of every company’s daily operations, due to the improved efficiency and collaboration it enables. But if you are not careful, it can also become a drain on your finances. Costs can spiral out of control faster than you might expect, having a detrimental effect on the entire business.
The only way to prevent this is by managing cloud costs carefully and efficiently. Luckily, that isn’t as difficult as it sounds. Some small changes now could make a big difference later.
Why is Cloud Computing Cost Management Important for SMBs?
Small and medium-sized businesses (SMBs) often operate on tight budgets. Each dollar spent is one that cannot be used for other things. This makes cost management essential, as one bad investment could hold you back from making a more important one.
The cloud is often touted as a crucial cost-effective solution for SMBs. While this is true, it also lends itself to a certain overconfidence. SMBs often over-rely on the cloud, purchasing far too many services and failing to put any substantial cost control measures in place. When this happens, the cloud can become a financial liability rather than the valuable tool it is supposed to be.
Fortunately, this is avoidable. There are a few simple ways that you can cut down on cloud waste. The positive impact this has on your business could be immense: One Gartner cloud cost management report found that taking steps to reduce expenses early can bring significant financial benefits, increasing profitability and your chances of long-term success.
1. Gain Visibility into Your Cloud Usage
To effectively manage cloud costs, you must first understand where your money is going. If you rely on multiple cloud platforms at once (such as using Google Cloud and Microsoft Azure at the same time), it is easy to lose track of how much is being spent.
Inventory each of your cloud services, noting down:
- Whether they are public cloud or private cloud
- What each service is used for
- How much is being spent on each
- The limitations of each service
- How they interact with the rest of the IT infrastructure
The cost visibility this provides is crucial. It enables significantly better resource allocation, especially in multi-cloud environments.
2. Right-Size Resources Regularly
Over-provisioning is one of the most common reasons that cloud costs start to rise. Because each individual subscription fee is so low, it can be tempting to purchase a higher tier than is actually necessary, or to collect many services that don’t contribute real value “Just in case”. The truth is that these small expenses can create serious problems later, especially if service providers begin to silently raise their prices.
Using the information gathered during your audit, identify unnecessary or unused resources. Do you have multiple cloud services that accomplish the same thing? Are you paying for more storage or additional features that no one is currently using? Optimise cloud resources carefully to ensure that you are only paying for services that provide tangible value.
3. Develop Stronger Business-IT Alignment
Wasteful technology investments often begin to occur when IT becomes misaligned from the business’ overall goals. New services may be purchased simply because they look interesting, or because authoritative sources report that they are invaluable for business success. In reality, they very often become a waste of money.
Take some time to re-familiarise yourself with your goals. Where should the business be in the next one, five, and ten years? What are your key performance indicators (KPIs)? Once you have defined this, consider which cloud technologies will actually help you make measurable progress towards these specific objectives. Any current or planned investments that don’t should be cut.
4. Leverage AI-Powered Cloud Cost Management Tools
Not every facet of cloud cost management needs to be manual. In fact, many of the top cloud service providers have created proprietary tools designed to help you reduce expenses. They accomplish this by using AI to detect features, services, and storage that often go unused. This information is then used to make actionable recommendations for stronger resource optimisation.
Leverage these tools wherever possible, to catch waste that you may have previously missed. Microsoft, for example, offers Azure Advisor, which not only cuts costs but helps improve the productivity and security of your cloud environments.
5. Create a Culture of Cost Accountability
Ultimately, cost control comes down to the decisions made by individuals. It will be difficult to maintain any positive changes if poor investments continue to be made, or employees begin to resist change. You must build a culture that values accountability and cost management.
Educate staff and stakeholders on the implications of each cloud investment, and explain why certain services must be cut. Highlight the potential benefits – for example, perhaps removal of one cloud platform means that more money can be invested into a long-awaited software. This will help secure early buy-in, reducing friction.
Clear policies should also be set that outline how investment decisions will be made in the future. Decide under which circumstances a new technology may be purchased. Put a stop to “Just because” investments that do not contribute value. These cultural changes will help hold everyone accountable and prevent your improvements from being undermined.
FAQs
What is Cloud Cost Management?
Cloud cost management is the act of removing unnecessary cloud services to keep expenses low. This is an important step in preserving your business’ financial wellbeing, as budgetary waste could prevent you from making important investments later.
How Can I Ensure Strong Azure Cloud Cost Management?
Azure Advisor is a digital Microsoft assistant that can automatically detect waste, providing actionable suggestions. You can also consult a Microsoft expert, if needed, to identify areas for improvement.
I Need Help Managing Cloud Costs. What Can I Do?
If you need help managing cloud costs, outsourcing is always an option. A third-party cloud expert can provide the insights you need to make better decisions. In some cases, they can even take over cloud management entirely, removing the burden from your shoulders.
Enjoy the Benefits of Cloud Computing, Stress-Free
The cloud provides an easy, cost-effective way to access powerful technological solutions for efficiency and growth – if it is managed properly. When cloud costs are left unchecked, you might find that your chosen services cause more harm than good. But the right mix of tools, best practices, and expert support will help you prevent this. With a little work, you can ensure that your cloud platforms continue to be a blessing, rather than a curse.
The cloud experts at National IT understand that your investments are only valuable if they can be leveraged effectively. And we know how difficult that can be, especially when you have bigger things to worry about. If you’re considering moving to the cloud, but aren’t sure you have the time or knowledge to handle it properly, learn how we can help.