EDITOR ’ S QUESTION
CARL FROGGETT , CIO , DEEP INSTINCT
Cost savings is one of the main reasons that companies are migrating to cloud environments , along with agility and the ability to scale up and down as business demands need . Cloud based technology is only cheaper with proper planning , as the ability to consume expensive resources is easy without proper controls and guardrails in your cloud implementation .
Historically , IT procurement provided this financial check to purchase hardware and software – but this is no longer viable .
Planning a cloud migration will include financial analysis .
This team would also produce usage-based billing to the organization , reporting on actual costs against missed savings , had the application or business planned ahead accordingly to leverage cheaper elements of cloud services . The financial team would be proactive in communicating to their organization users cheaper alternatives at a point in time .
IT traditionally worked by purchasing infrastructure for ‘ peak ’ workloads to support business demands , even though the average utilization overall is much lower . Usage-based billing has been very difficult and costly , so , generally , IT would recover costs using averages – meaning the true cost of a specific business workload or application is not known .
Planning a cloud migration will include financial analysis .
However , it is more in the long-term day-to-day running where financial surprises appear , since without proper structure and guardrails rapid over consumption of cloud services can occur .
A cloud financial team is required to define the financial strategy for an organization ’ s cloud strategy – not just for the migration but day-to-day upkeep .
This team would be analyzing current and future cloud demand and taking advantage of cloud provider discounts for booking capacity in advance – which is substantially cheaper than on-demand costs , for example .
A clean up of assets , data and applications prior to migration will lower all initial costs . Going over data limits or storing excessive amounts of data , just because cloud is scalable and easily consumed by applications , can lead to premium fees and other charges .
The organization needs to implement guardrails to avoid this , especially as it can spiral out of control in a matter of minutes rather than weeks or months in traditional data centers .
Having a clear cloud strategy to drive applications into fewer cloud providers can leverage volume discounts reducing overall costs . A cloud application or workload should be architected and developed to be portable between cloud vendors , so future cost discounts between cloud vendors can be easily leveraged . This approach also enables resiliency if there is an issue on a particular cloud vendor platform .
Reduction of size or retirement of infrastructure , including networks , that is no longer needed is often overlooked as a cost saving method , but as software and hardware are assets , they need to be written off .
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