According to Gartner, the cloud services industry is growing more than five times faster than other IT categories as companies shift away from internal hardware to greater use of public cloud infrastructures. While the cloud is enabling enterprises to shift costs away from purchasing hardware, services and running their own data centres – another question emerges: Are companies actually saving money and spending wisely on their cloud infrastructure? The massive shift in spend identified by Gartner underscores the need for enterprises to start tracking, managing and optimising cloud services usage—essential for eliminating waste, controlling costs and improving utilisation.
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Infrastructure as a Service (IaaS) offers the ability to only incur infrastructure costs when needed, which is great for test workloads—no need to buy a permanent piece of hardware and have it sit idle most of the time. Simply turn on virtual machines, which are computer files that behave like an actual computer, for the amount of time needed. When the virtual machines are off, payment stops. However, most people are not used to turning virtual machines off – which means oftentimes organisations pay for more cloud service than they need. The cost of the wasted usage appears small—pennies per hour. But, because a large enterprise may have hundreds or thousands of idly running virtual machines…the pennies add up quickly.
For many production loads, the virtual machines always need to be on – so, is there a way to save money here? Yes. Depending on the cloud provider, subscription pricing may be an option, meaning lower prices for “reserved” instances. The savings compared to pure, on-demand pricing can be significant – 40 to 50 per cent over time.
However, most businesses have virtually no insight into whether they’re spending too much on cloud services, or are efficiently utilising their investment. Most have multiple cloud accounts that are often purchased in a decentralised fashion by different departments and business units—with no single view of adoption and usage across the company. They need a way to automatically import usage and billing data from multiple accounts to deliver a centralised view across the enterprise. In addition, as companies continue to adopt cloud services and create even more complex, heterogeneous IT environments, their asset management tools must evolve and expand to optimise not only on-premises hardware and software assets, but cloud infrastructure services as well.
Below are the top five ways organisations can optimise their cloud infrastructure services:
- Utilise a dashboard that provides an executive-level view of the use of cloud resources, presenting aggregated consumption patterns and total spend across all cloud subscriptions. Enterprises can analyse data and view consumption reports and breakdowns based on instance sizes and types, subscription models (on-demand or “reserved”), assess consumption rates by departments and perform various trending analysis.
- Track cloud services spending and usage across all departments to eliminate over-buying and underutilisation of cloud capacity and instances.
- More effectively negotiate volume discounts and rationalise usage of cloud instances.
- Enable IT’s transition to a service-based organisation by centralising management of cloud services—minimising overhead, managing costs and facilitating chargeback of cloud services.
- Optimise usage of pre-paid capacity (reserved instances) to minimise costs.
Businesses are quickly subscribing to public cloud services in order to decrease infrastructure costs and provide flexible computing resources that can be rapidly scaled upward or downward, depending on demand. However, they can’t recognise real cost reduction and efficiency without visibility into, and control over, cloud services spend. Software Asset Management processes and technology need to be able to account for, track and manage cloud infrastructure services.
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Cloud services can provide real benefits, but, regardless of the type of cloud services used, companies need to consider employing software licence and subscription optimisation processes and technology to optimise their investment in cloud services and software. These tools will help identify idle and under-utilised instances and subscriptions, and identify licence compliance issues. This will help maximise return on cloud services investment, whether in IaaS, SaaS or other types of cloud services.
Jim Ryan, President and CEO, Flexera Software
Jim joined Macrovision in 2004 when he helped sell InstallShield Software Corporation to Macrovision. At the time, Jim was senior vice president of international sales and operations based in the United Kingdom.
Previously, Jim was regional sales director with Reliant Data Systems (acquired by Compuware Corporation) responsible for both direct and OEM sales. Jim was also director of channel sales at Unison Software (acquired by Tivoli Systems) where he spearheaded the channel program for its distributed systems management solutions group. Jim began his career at IBM Corporation. Jim earned a bachelor's degree of arts from Marquette University where he studied International Political Science and French.