Managing the Cost Turbulence in Cloud

“Cloud is the new normal” for businesses around the world. The advantage of OPEX model over CAPEX is accelerating the cloud adoption across large enterprises. But as businesses are migrating to cloud, one of the key challenges faced by them is predicting and forecasting their cloud spend. This is due to the on-demand infrastructure and pay-as-you-go  business model offered by cloud providers. Managing the ‘Cost Turbulence’ in the cloud is becoming a bigger challenge, besides data security and cloud automation.

The on-demand availability, ability to launch infrastructure using CLI command or via APIs,  easy to design applications that can auto-scale & provide fault-tolerance are causing disruption to financial teams in the businesses in understanding and managing their cloud spend easily while adhering to business wide budgeting controls.

The following changes in the IT process due to cloud adoption are causing major challenges to business owners & finance controllers responsible for managing the business budgeting:

Elasticity over Control – In Cloud, there is a no control process required for engineers to launch servers & infrastructure once they have required identity access. Also there is no easy way to restrict number of servers or duration as one of the basic premises of cloud is elasticity, on-demand availability and auto-scaling to engineer next generation applications.

Agility over Approval – In the Cloud era, the focus is on agility over approval mechanisms for engineering/product/application teams. The agility offered by Cloud will help engineers to develop, build and manage their infrastructure at a remarkable speed rather than being subjected to approval processes like on-premise (floating procurement process for hardware acquisition). While this is a great choice for businesses, the financial forecasting will be a challenge resulting in budgeted cost spikes & over runs.

So how does finance departments and procurement teams deal with the cost spikes, budget over runs causing cost turbulence to their business budgeting in the Cloud era?

In a nutshell it requires new processes and applications like Botmetric to aid in managing the business budgeting & spend forecasting.

Enforce Tagging – While not compromising either the elasticity or agility, you need to encourage and enforce tagging for infrastructure and services used by your teams. You can also define a shutdown or stop policy for the infrastructure that doesn’t follow the tagging compliance using automated programs.

Chargeback & Report – By having an ability to chargeback the respective spend to specific teams, departments or groups in the company will give finance teams a relief to identity who caused the cost spikes & over runs while making the teams accountable for their spend.

Track Idle Infrastructure – Tools like Botmetric will help you in identifying idle infrastructure based on resource usage rules to notify users about idle infrastructure in their cloud environments. This idle infrastructure can be stopped or servers can be downgraded to minimum size for reduction in the spend.

If you are a business owner or finance executive looking to control of the cost turbulence caused by cloud, then try Botmetric  to see how we can help you. As they say, change is the only constant thing in business so you need to learn to adapt your processes for the cloud world.