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How to Tell if Your Business Is Wasting Cloud Funds

If you haven't used a cloud server before, you may be wondering how wasting money on it is possible unless you're simply overpaying. Unfortunately, wasting cloud funds is easy to do - no matter how many benefits a business receives from its server.

Don't worry: There is no internal cloud scam. Fund loss happens to every business, big and small, even when they remain vigilant on the matter. What can be done is knowing the risks, determining where the money is going and taking active steps to reduce the waste.

Idling Resources

Your cloud servers aren't going to be used every minute of every day, no matter how big the business is. If you're paying for the service by hours or minutes in a week, you're paying for the time the cloud is doing nothing but sitting there. So long as the cloud is idle, no money being generated.

It's predicted that in 2019, $26.3 billion will be spent on the cloud. About 44 percent of the time will be nonproduction and about 76 will be idle, resulting in $8.8 billion wasted.

Oversized Packages

Usually, buying in bulk is a good thing - as long as you know you'll use the extra resources. This isn't true for the cloud, because you're likely not going to use all the extra parts. If you have too much infrastructure, then you're paying for capacity you don't need. According to RightScale, 40 percent are at least one size larger than need be. By reducing just one size, the cost can be cut by 50 percent, while going down two sizes can save 75 percent.

Still assuming the $26.3 billion in spending, with 40 percent of oversized instances and 50 percent of overspend, then $5.3 billion is being wasted on oversized resources. Thankfully, this can be solved as long as the extra space isn't needed or downgrading doesn't make things difficult.

Poor Integration

Most businesses in the modern era are forced to rely on cloud computing just to keep up with the market and competitors. WIRED Magazine Editor-in-Chief Greg Williams says, "Cloud is the fundamental basis for all modern digital products and services ... Cloud is necessary for everything we do." Because the cloud has to be implemented into a business, sometimes everything doesn't go right.

When the integration is poor or the resources are lacking, hundreds of orders can be lost each year, resulting in $250,000 to $500,000 of lost revenue. The cloud may be necessary for a business to stand on its own in these technologically modern times, but not integrating the cloud correctly can do a lot more harm than good.

Saving Money

Knowing is half the battle, as they say. Once you are aware of all the problems the cloud can provide, everything else can be worked around. Solutions for all these wasted funds may not be easy to find, but they do exist and can be implemented in order to save your company a lot of money.

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About the Author

Kayla Matthews is a tech-loving blogger who writes and edits ProductivityBytes.com. Follow her on Twitter @productibytes to read all of her latest posts!
Published Thursday, February 14, 2019 7:38 AM by David Marshall
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