What is wasted cloud spend, and how can you avoid it?

When used correctly, public clouds can provide sizable returns in comparison to how much your business initially invested in them. To illustrate, the processing power the cloud can grant to your eCommerce website can result in way more orders fulfilled than if you continued to rely on on-premises (on-prem) IT resources.
 
Conversely, improper use of public clouds can lead to needless spending that can get your business into financial trouble. This post takes a closer look at what wasted cloud spend is and what you can do to avoid it.

What does wasted cloud spend look like?

Cloud resources, in essence, are means to ends. Cloud servers provide business apps with the processing power they need to function and ultimately contribute to your company’s bottom line. For example, email servers allow you to communicate with customers, business partners, and internal staff. Cloud storage, on the other hand, allows you to keep all sorts of business records at the ready, ensure data availability via backups, and archive old data for as long as you need it.
 
Therefore, to waste cloud resources is to use them without achieving your intended ends. One wasteful practice is overprovisioning, which is the allocation of too many cloud resources that end up being underutilized or not utilized at all.
 
Overprovisioning occurs because of human error. Some companies prefer to manually control how much cloud processing power they use instead of using auto-scaling. This entails provisioning additional resources only when business demand spikes such as during peak season. In addition, they avoid needless usage costs if a DDoS or similar attack works servers to capacity. However, when demand tapers off, the admin may forget to revert provisioning back to normal levels.
 
To use a car metaphor, this is like shifting to a gear that burns more fuel to climb a steep incline, then forgetting to shift back to a lower gear once you’re on a flatter road. Similar to how the car will burn fuel needlessly, so too will your business burn money on excess resources.

How can your business prevent wasted cloud spend?

Vigilance is key to ensuring that you’re spending only on cloud resources that you actually need. You’ll want to:
 
●      Completely assess your cloud spend on a regular basis
●      Correct how many resources are provisioned
●      Shift from subscription models to pay-per-use payment models when the cloud resource isn’t used 24/7
●      Deleting abandoned instances to cut down on costly software license allocation
 
This is a lot of work, which is why we recommend that you utilize a managed private cloud instead of a public cloud.

Why choose a managed private cloud?

It's a given that the upfront costs of a public cloud are lower than those of a managed private cloud. However, public cloud costs start to approach or even exceed managed private cloud costs when businesses lack the expertise to optimize cloud use, and they make the following mistakes:
 
●      They pay for additional cloud services they think they might need in the future but never get to use.
●      They fail to understand what drives cloud costs up.
●      They try to audit and optimize their clouds on their own but become lost in the weeds in the process.
 
With a managed private cloud, cloud experts optimize your cloud for you. You can rest assured that every dollar you spend goes to growing your business. In addition, those experts also keep your cloud secure and proactively neutralize cyberthreats for you. In short, while it looks like managed private clouds are more expensive than public clouds at the onset, the former actually offer incredible value for money.
 
To find out if a managed private cloud is the best choice for your business, schedule a free consultation with our cloud specialists at SimplyClouds today.