Businesses are struggling with unpredictable cloud bills. Managing cloud computing expenses is a growing concern, especially with an increasing reliance on digital infrastructure.
According to Gartner, spending on public cloud services is expected to increase by 20% in 2024, and with most organizations spending more on cloud storage than they budget for, cloud costs could rapidly become an unmanageable expenditure for many.
So, how can organizations navigate these rising costs without compromising on the cloud services they need?
The hidden costs of the cloud are catching companies by surprise
The first step is identifying the hidden costs of the cloud and areas where overspending is occurring. Businesses have been ambushed by unexpected cloud costs with subscription models. This leads to inconsistent monthly costs. The advantages of the cloud, like scalable IT infrastructure, can be a double-edged sword when considering costs and waste. At the same time, many of the largest providers of cloud infrastructure applications and services are increasing storage and cloud hosting fees as inflation takes hold.
Also, with many businesses operating in a multi-cloud environment without a comprehensive tool to show costs from across the entire cloud platform, they can’t track resources such as a usage-level breakdown. It’s easy to over-provision resources in the cloud, leading to wasted spend. Costs often overrun, and without full visibility, companies fail to pinpoint the exact cause.
If businesses don’t have full visibility of their cloud usage, they’ll never know exactly where they are overspending or if they are paying for services they didn't know existed. It’s also much harder for organizations to experiment and innovate with the latest cloud technology if they don’t fully know what they are using in the first place.
Cloud cost management and cloud optimization can help to minimize expenses and maximize the value derived from cloud investments. It's crucial to identify a predictable cloud vendor who can help with optimizing workloads. Greater transparency across the cloud infrastructure is essential, as is investment into tools that can help provide much-needed visibility when monitoring costs and protecting the cloud.
Adopting a holistic approach to cloud management
In complex, hybrid cloud environments, businesses are often unsure where outsized cloud costs are coming from. They often find that they’re paying for outdated resources or unnecessary storage.
With a more holistic approach, businesses gain a greater understanding of their requirements and the associated costs. Not only does this eliminate waste, but it also helps organizations be more strategic about their requirements. But this approach is not solely concerned with cutting costs – it’s about aligning cloud expenses with an organization’s business objectives. The goal is to strike a balance between cost efficiency and maximizing the benefits of cloud technology for the overall business.
Tools of the trade
The need for scalable and budget-friendly cloud resources is unprecedented. However, businesses also need to invest in tools that help manage these resources and ensure the cloud is cost-efficient.
Understand your workloads, implement load balancing, and continuously review and adjust to reduce the cloud costs. Cloud spend tools that support cloud cost management across various cloud platforms give businesses a unified view of their spending and are the most beneficial to businesses.
Businesses should also look for tools that offer in-depth cost analysis and customizable reports to identify cost drivers, detect anomalies, and track spending trends over time. Reports in native tools, for instance, sometimes don’t track the resources level usage or user-level breakdown to identify who or what resource attributed to the cost overrun. Most public cloud platforms offer discounts if you pay in advance, but the cost overruns and limitations often neutralize the discounts you receive. Instead, to leverage cost saving opportunities, businesses should identify and invest in tools that can set budgets and cost forecasting capabilities, help anticipate future expenses and proactively plan.
How AI can help
A Wasabi report shows that 49% of CIOs expect AI and ML adoption to create challenges for the cloud due to AI and ML’s substantial use of data.
However, AI could also be a significant asset when considering cloud costs. There’s potential for the technology to bring greater financial governance to the cloud, namely through its ability to detect unexpected spikes or irregularities in cloud expenses by analyzing large amounts of data. AI could also play a crucial role in identifying cybersecurity threats and helping businesses keep up with the technology landscape.
Staying ahead of cloud costs
Access to scalable, budget friendly cloud resources is more important to businesses than ever before.
The rise of AI and ML has driven a new demand for cloud space, and research shows that IT leaders anticipate cloud costs will surpass budget allocations.
In this environment, adopting a holistic approach can help businesses keep an eye across the whole cloud landscape to quickly identify rising–and unnecessary–costs. Cloud spend tools, along with leveraging tech such as GenAI, will also play a significant role. Businesses can also foster a culture of cost awareness, which helps keep costs under control and ensures cloud investments deliver maximum value. Ultimately, cost management for cloud resources is an ongoing journey.
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