Cloud Spend Management: Your Guide to Cloud Cost Optimization
Posted June 9, 2023 by Sayers
Companies rely increasingly on cloud-based infrastructure to minimize risk and take advantage of the scalability and cost-effectiveness cloud offers.
Gartner forecasts worldwide end-user spending on public cloud services to grow nearly 22% to total $597.3 billion in 2023, up from $491 billion in 2022. Of that cloud market, infrastructure-as-a-service is forecast to experience the highest end-user spending growth in 2023 at nearly 31%.
As part of a cloud-first strategy, organizations are turning to cloud spend management strategies and solutions to control cloud expenses while increasing efficiency, improving budget planning, and better utilizing cloud resources.
What Is Cloud Spend Management?
Managing cloud spend involves tracking and analyzing expenses associated with cloud services and infrastructure. Cloud spend management then incorporates cloud cost optimization to apply those insights so the business can get maximum value for every dollar spent on cloud services.
Organizations can apply cloud spend management strategies and tools to:
- get better control over their cloud usage
- identify cost-saving opportunities
- allocate resources more efficiently
- improve their compliance measures, and,
- focus on innovation that drives growth.
Benefits of Cloud Spend Management
Cloud spend management offers a major advantage in cost savings, as businesses can identify unnecessary spending and get the most value from their cloud usage. Increased visibility into cloud costs and usage allows for more informed decision-making and the ability to allocate cloud resources without overspending.
Overall, cloud spend management strategies enable businesses to:
1. Improve Cost Visibility And Cost Control
Cloud spend management offers real-time visibility into the costs associated with cloud services, so you can identify areas to reduce costs and achieve long-term savings.
With the ability to track expenses across an organization, you can identify areas of overspending, avoid unexpected charges, and better forecast and plan budgets to allow for future projects as part of your cloud strategy.
By centralizing financial data and automating processes, cloud spend management also can help eliminate errors and reduce the risk of fraudulent activity in the cloud.
2. Conduct Better Budget Planning
Using cloud spend management practices, organizations can track and analyze cloud spending to enable better budget planning and drive growth.
Real-time cost visibility helps you identify areas of inefficiency and quickly make data-driven decisions to support business objectives.
Cloud spend management technologies offer automation features and customizable solutions that save time and resources for finance teams. Improved agility means spending can better align with overall financial goals.
3. Better Allocate Resources
With real-time visibility into cloud spending data, businesses can make better, informed decisions to free up and allocate cloud services and storage for other initiatives. Those initiatives can range from driving digital transformation to enhancing customer experience and promoting growth.
Best Practices For Cloud Spend Management
A range of best practices – including cost optimization strategies, regular reviews of cloud service agreements, and collaboration among teams – can help organizations reap the most benefits from cloud spend management.
More specifically:
1. Understand Your Business Needs
Before implementing a cloud spend management strategy, take stock of your organization’s needs and priorities. Use assessments to understand where workloads could go, and how much they’re going to cost now as well as later. Bob Livingstone, Director of Cloud Engineering at Sayers, says:
“I’ve seen projects where the customer has moved things up to the cloud and broke the budget within a few months because they didn’t understand what that would look like once they adopted the cloud.”
Understand the different types of cloud services available and their associated costs, and establish clear guidelines and policies for cloud usage within your organization so you can avoid unnecessary expenses.
2. Optimize Your Use Of Cloud Resources
Regularly analyze your cloud spend data, assess your current spending patterns, and identify areas needing cost optimization.
Rightsizing, or matching cloud server resources to actual workload performance and capacity needs at the lowest cost, should be an ongoing process while considering future growth.
Monitoring and regularly reviewing your use of cloud resources can lead to significant cost savings, as you can avoid overprovisioning and underutilization.
3. Implement Cloud Cost Governance Policies
Get more value from your cloud investment by establishing clear budgetary guidelines and cloud cost governance policies. These can help your organization maintain control over cloud spending while still meeting business objectives. Having clear guidelines for managing cloud costs, including budget tracking and allocation strategies, helps identify areas for cost savings.
Automated tools to closely monitor and analyze your cloud spend data make it easier to implement these policies. By regularly refining your cloud cost governance policies, you can align your business with changing market conditions while freeing up resources for other areas of investment.
4. Regularly Review And Monitor Costs
Monitoring and analyzing costs on a regular basis helps identify cloud resources that are unused or underused, so you can reduce unnecessary expenses and redirect those savings toward new projects and innovations.
Use cost management tools to continuously monitor cloud spend data for better cost control, more informed decisions, and greater agility amid changing market conditions.
Driving Innovation With Cloud Spend Management
Cloud spend management can help your business unlock new opportunities for innovation by freeing up cloud resources and providing real-time insights into cloud usage patterns.
With enhanced cost visibility, improved cost control, better budget planning, and cloud cost governance policies, cloud spend management enables you to make informed decisions about resource allocation to make new innovations possible.
Questions? Contact us at Sayers today to learn how cloud spend management strategies and technologies can help your business.
