Many modern organisations have adopted a ‘cloud-first’ strategy due to its multiple benefits. But it’s important they carefully plan their journey as additional costs can easily be incurred if left unchecked. Glyn Yates, Regional Lead, IMEA, Matrix42, tells us what organisations should look for in an expense management solution.
What are the benefits of a ‘cloud first’ strategy for modern organisations?
There are many benefits of a cloud first strategy. We are all aware of reduced IT costs shifting the provision, management and maintenance of infrastructure on to Cloud Service Providers, as well as increased agility, baked-in Business Continuity, improved collaboration capabilities and leveraging OpEx models, to name a few.
However, without checks and balances, cloud costs can spiral out of control and it’s easy to understand why, as most organisations who adopt cloud first still need to journey to their end goal, with migration of legacy on-premise applications needing careful planning.
As a result, these transitional hybrid scenarios can create additional costs to an organisation if not managed well or if the company simply doesn’t have the insights available to make good decisions.
Can you tell us more about some of the challenges organisations are facing when it comes to managing cloud expenses?
With the three primary service providers of AWS, Azure and GCP there is often confusion during evaluation, with a variety of needs being mapped into complex pricing models making comparisons nearly impossible when it comes to cost vs. service.
A couple of famous quotes spring to mind with both ‘complexity is the enemy of execution’ and of course ‘the mystery is where the money is’ being equally apt.
We need to plan for different instance types to meet the application and business needs – general purpose, memory optimised, compute optimised.
Then we can throw in the reserved instances or committed use discounts, offering cost advantages over on-demand services for longer term commitments (crystal ball is optional).
It may be that the best approach is to have instances with all three or even more, but that leads to increased cloud management and strenuous report consolidation for transparency.
Of course, we would still like the flexibility of spinning up extra resources on-demand when needed, for month end or for the DevOps teams for example, but these on-demand options generate unplanned charges creating uncertainty when it comes to budgeting or forecasting, so we should calculate whether the extra cost of on-demand would be higher than having more reserved instances available in the first place.
In some studies it has been estimated that organisations over commit their reserved instances by around 30%, just in case, which means 30% higher costs than needed.
What compliance requirements/issues are organisations facing?
When considering compliance in the cloud, we should look at it from two primary standpoints – data and licensing.
Data compliance can be tricky with data protection, data localisation and data sovereignty (they are distinctly different) factors coming into play, especially when dealing with distributed organisational structures or for customers outside your borders.
Cloud doesn’t mean those pesky vendor audits for licensing compliance go away either and, in some ways, makes it a little more challenging to manage, monitor and report.
‘Gotcha’s’ include excess installation (deploying more than entitled to), virtualisation (paying for virtual instead of physical capacity), user licensed roles (providing features to users that are not entitled) and in-direct access (hiding a number of users behind a single application account).
With most organisations only conducting compliance checks once a year or, even worse, only when audited, this creates risks of extra cost and even litigation.
Can an organisation use Software Asset Management for management of cloud instances?
Software Asset Management and asset management in general can be used for discovery, inventory, management and compliance of what sits ‘in’ a cloud environment.
SAM can also be used for managing many SaaS applications with plug-ins to the likes of Microsoft365 or Adobe Creative Cloud. However, the management of an organisation’s cloud environment itself, whether PaaS or IaaS, requires something more, especially when you could be using multiple cloud service providers.
What should organisations look for in an expense management solution?
When evaluating cloud expense management solutions there are some key capabilities to take into consideration that will make a real difference and provide greater value to an organisation.
Ease of setup and out of the box configuration, while providing customisation capabilities, offers organisations reduced ‘time to value’, while providing flexibility to manage complex environments easily.
Single pane visibility, where multiple cloud provider usage details can be viewed through a single UI, along with combined dashboards and reporting, converting point-in-time, trend and seasonal information into business intelligence for accurate and timely decision making.
Insights into instance usage will allow organisations to switch workloads, optimise instances and even spin down unused machines.
Individual CSP plan cost inclusion allows organisations to conduct scenario-based cost and capacity planning and understand how future needs would be best served from all the options available.
Understanding cloud service consumption across an enterprise will provide greater granularity and accuracy for cross-charging per business unit or location.
Integration or interoperability with a complimentary service management platform would allow request, approval and provisioning of on-demand cloud services that follow internal governance, policy and protocol ensuring no rogue usage.
The Matrix42 intuitive platform includes Software Asset Management, Cloud Expense Management and Enterprise Service Management for complete management of SaaS, IaaS and PaaS environments, providing unrivalled business value with great operational efficiencies and strong cost control, reduction and optimisation in one powerful, yet easy, single solution.
