By Tom Monk, Senior Director of Product Management at Navisite
Across industries, organizations are increasingly facing strained IT budgets. As a result, companies are moving more of their core operations and processes to the public cloud.
While moving to the cloud is a key step in any organization’s digital transformation journey, simply migrating isn’t enough. A survey from Flexera found that 82% of cloud users report managing spend as their top challenge. Companies need to be smarter when it comes to cloud spend to ensure optimal cost savings and understand new opportunities to reduce expenses. The good news is – both are achievable.
Below are three key areas where companies can get the biggest bang for their buck and achieve major cost savings in the cloud.
1. Adopt a FinOps Framework
Organizations are increasingly seeking the expertise of specialized cloud financial operations (FinOps) experts to help control cloud costs. FinOps is a set of policies and a way of thinking, which combines financial expertise with knowledge of cloud operations. This helps to better control, measure, and understand cloud spend, bridging the gap between finance and IT.
With cloud spending waste estimated at between 10-30% according to IDC, FinOps gives organizations visibility across all departments, empowering them to make decisions that will better inform their cost-optimization strategy, such as making sense of confusing monthly billing. Because finance teams are used to traditional IT models, they may not be comfortable with the pay-as-you-go model of the cloud. FinOps teams work with finance departments to help them understand cloud spend, leading to better forecasting of budgets and an understanding of where spend is going.
While still an emerging field, FinOps is catching on. Enterprise Strategy Group found that 34% of those surveyed say their organizations are using FinOps extensively, while 31% are using it in a limited fashion. With FinOps still in its early stages, companies looking to grow their business on the cloud should look to implement FinOps now to make a long-term impact.
2. Automate Common DevOps Processes
DevOps operations are table stakes for running an optimized business on the cloud, and at its core, is a collaborative methodology intended to break down the barriers between development and operations teams. By doing so, organizations can ultimately go to market quicker, innovate faster, and manage the entire application lifecycle maximizing efficiency and agility. Today, DevOps is simply a must-have.
As crucial as DevOps practices may be, these teams are increasingly constrained. Automating common DevOps processes can not only free up their time but also help reduce spend. Good examples of automation include repeatable DevOps tasks such as building, deployment, and unit testing. Automation can also be extended to high-value areas like regression testing, enforcing tagging strategies around deployed assets, or how certain services within a cloud environment are architected. Eventually, this can even lead to automation of the entire test processes-which further drives cost savings by eliminating manual steps and extra resources needed for development.
By automating DevOps processes, businesses can reallocate valuable resources to focus on innovation and differentiation, cloud optimization, and workload performance.
3. Automate Reserved Instances
Most cloud providers offer services at a lower rate if a certain capacity or usage commitment is made in advance. Reserved instances are a reservation level where a company indicates a specific number and type of instances needed. If that commitment is met, they are rewarded with a discount.
What makes reserved instances unique in terms of cost savings is that many hyperscalers will allow an organization to sell back a reserved instance that has been purchased. By doing so, the cloud provider can take that reservation and sell it to another company. This trading on the market of reserved instances that are no longer needed operates in the same way as the financial market.
By working with a third-party provider or developing a custom-built solution in-house, organizations can leverage software to automate the task of selling reserved instances. This eliminates the burden on cloud teams to manage and analyze reserved instances, which are time-consuming and highly manual tasks. Organizations can also take advantage of the savings provided by reserved instances without the financial commitment. This “set it and forget it” approach ensures teams will save time and money without ever needing to lift a finger – and that’s the ultimate benefit.
Achieving Cloud Savings with an MSP
Adopting a FinOps framework, DevOps automation, and reserved instances are all great ways to operate cost-efficiently on the cloud. But it’s no secret that finding – and affording – the right expertise to implement these strategies is challenging. Outsourcing to a qualified partner or MSP is a good option for those who don’t have the expertise in-house or are looking to augment their capabilities. Companies want to focus on their core competencies, not cloud management-and leave the grunt work of managing cloud workloads, overseeing billing and usage, and staying on top of new cloud tools and technologies to the MSP.
With any one of these strategies, cost savings can be achieved faster than you might think-and ultimately support a more agile and competitive business on the cloud.
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ABOUT THE AUTHOR
Tom Monk is the senior director of product management at Navisite. He brings years of experience developing cloud solutions and a strong technical background to his role at Navisite, helping customers modernize their enterprise workloads and adopt best-fit cloud platforms and technologies tailored to their business.
