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Stop your customers from wasting 35% of their cloud spend

Peter Krass's picture

by Peter Krass on 07/10/2019
Blog Category: cloud-and-data-centers

Are your customers wasting 35 cents of every dollar they spend on the public cloud?

A recently issued report says they probably are. That’s a shame, since the public cloud is supposed to save your clients money, not help them waste it.

Yet the public cloud’s on-demand nature — one of the cloud’s chief selling points — can in fact lead to uncontrolled costs. So explains a recent white paper, “Essential Strategies for Managing Cloud Costs,” from enterprise solutions provider Flexera.

That waste rate of 35%, Flexera esimates, works out to over $10 billion across just the top 3 public-cloud providers: Amazon Web Services, Microsoft Azure and Google Cloud. Ten billion dollars is a lot of money to waste.

Waste in many forms

Public-cloud waste takes many forms. For one, your customers may be running many of their instances on a 24x7 basis, when that’s hardly needed.

For another, they may be overprovisioning instances. Flexera estimates that nearly 40% of the total instance spend goes to virtual machines (VMs) that run below 40% of CPU and memory utilization. Much of that is even worse, below 20%.

For yet another, customers may be neglecting to clean up old storage data, or failing to shut down services that are no longer used. All that leads to waste.

But since there’s so much money at stake, why do companies let this waste occur? Flexera points to 4 main reasons:

> Cloud pricing is complex: Too many options make it hard to know what’s best. For example, the 3 leading public-cloud providers alone offer literally tens of thousands of prices just for virtual machines. Try sorting that out!

> Selecting the appropriate instance sizes is difficult: When organizations migrate instances from on-prem systems to the cloud, they often take a “better safe than sorry” approach to provisioning. And once an infrastructure is overprovisioned, it rarely gets downsized.

> Resource owners lack visibility into their cost implications: The hourly rate charged by a cloud provider may be low, but what does it cost over weeks, months and years? That calculation isn’t easy.

> Organizations lack automation to optimize workloads: Okay, Flexera has a vested interest on this point, since it offers automation services and solutions. But eliminating waste isn’t a once-and-done project. The on-demand nature of the cloud means that waste is likely to re-occur over time.

Take action, stop the waste

What can you do to help your customers reduce their public-cloud waste? Follow these four steps, Flexera says, and you’ll be on your way:

Step 1: Work with the customer’s cloud governance team to uncover waste and possible opportunities for savings.

Step 2: Share those findings, along with your recommendations, to the actual resource owners.

Step 3: Take action! Downsize an underutilized instance. Turn off services that are no longer being used. Delete storage volumes unattached to instances.

Step 4: Consider automation. Manual clean-up is the way to get started. But over time, waste will likely re-occur as new resources are added and changed. Automation tools can issue alerts and reports on waste, then take action to actually resolve it.

Help your customers cut their public-cloud waste, and they’ll praise you to the skies.


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