How can you maximize your cloud investment?

According to Ricky Sundrani, principal in pricing management at Everest Group, many companies are unable to measure the true value of their cloud investments because they lack a complete view of their consumption, spend, and optimization opportunities. Andy Sealock, a senior principal in advisory and transformation at West Monroe, agrees: “Many companies have been surprised by higher-than-expected spend, which has impacted the business cases that supported their programs.”.

Actually, did you know that over two-thirds of organizations are unaware of the full value of their cloud investments?.

This is because there are overlooked factors during migration that increase costs, such as unoptimized workloads, inefficient demand management policies, or unexpected expenses. Therefore, adequate planning and rigorous cloud cost control are essential. Let's see how you can benefit from such strategies. 

 Benefits of Cloud Cost Management 

• Planning: Cost management strategies allow you to plan migration or operations according to business and application priorities.  
• Predictability Strategies of this nature allow you to forecast expenses and understand the budget allocated for infrastructure. Likewise, they help you establish guiding principles and clear objectives for cloud utilization. This is important for aligning incentives and holding leaders accountable.  
• Efficient use Cost management provides you with tools to assess demand volatility and adapt your resources as needed. The result is more efficient use of your infrastructure. 
• Performance improvement: A well-executed plan helps you identify and automate low-value tasks so you can focus on strategic initiatives.  
• Increased visibility: Implement monitoring and management tools to control costs and manage risks. Adjust software licenses and fees to maximize savings and avoid long-term commitments. 

 Challenges in Cloud Cost Management 

 Despite the benefits of cloud cost management, there are challenges to overcome to maximize the real value of investments. Some of these include: 

• Poor visibilityThe lack of visibility into cloud spending can lead to hidden costs and misunderstandings about expenses. To overcome this barrier, information is needed. The management tools that each provider makes available to their users are of great help in this regard.  
• Inaccurate budget forecastsCloud costs typically vary due to several factors (e.g., based on resource demand). This can create noise and make it difficult to generate estimates. Tools for cost management based on historical data are very useful for increasing predictability. 
• Poorly defined rolesIf licenses are not centralized, if the authority to decide is not delegated, and if tasks are not clearly assigned, unnecessary costs can be generated. Therefore, it is important to establish concrete roles and goals to separate those who handle the core business from those who manage the infrastructure. 
• Billing complexity: The finance team must manage cloud billing, and each department must understand its cost structure to avoid unnecessary expenses.  

 Actions to Optimize Cloud Investment 

We need to be very clear about something. Although the cloud offers scalability, efficiency, security, reliability, and the possibility of cost optimization, these benefits are not obtained overnight. On the contrary, they require active and conscious management. The problem? The latter needs time and, above all, resources. For this reason, business cost optimization begins with the team's shared knowledge of the tools, processes, and dependencies needed to act intelligently. You must also be clear that the decisions of anyone influence cost control, the adoption lifecycle, and long-term operations. In this way, strategic clarity is very important. However, it is not the only thing you should pay attention to. 

 What other actions help maximize the value of cloud investments? 

• Assemble a cross-functional team: Efficient cost management requires close involvement from business units and development teams to prevent inefficiencies and unnecessary expenses. It also involves forming a multidisciplinary team that includes all stakeholders in the cloud transformation process, to avoid errors and communication failures. 
• Define baselines and realistic expectations: Organizations must have a complete understanding of the benefits they expect to gain from the cloud and be aware of the resources they currently have.   
• Create a comprehensive business caseMigration must be considered a modernization process to avoid long-term costs. Avoid taking shortcuts that lead to structural problems and additional expenses. 
• Read the contract details: A full understanding of cloud contract terms is crucial to avoid surprises or misunderstandings about limits and fees. Sometimes you might think your usage is normal when the provider actually considers it excessive. Seek technical and contractual clarity to maximize the value of your investment.  
• Be cautious with minimum commitments: When operating in the cloud, it is essential to avoid generating excessive volumes or spending levels. 
• Don't leave any parts of the cloud untransformed: adopt native services, refactor applications, and maintain a philosophy open to modernizing your organization's internal and external processes. 
• Invest in a cloud management platform: Use tools that offer real-time visibility of your consumption and expenses to avoid unexpected bills and efficiently manage your activity. 
• Hire talent with cloud management experience: This will allow you to implement effective tools and design policies that keep costs in check. 

• Take demand management seriously: establish clear policies for cloud usage, communicate and enforce these policies to prevent uncontrolled sprawl. 
• Address the cost overruns immediately. identify and immediately resolve unexpected costs to prevent them from becoming a major problem. 
• Continuously monitor and measure cloud value: establish service level agreements and periodically re-evaluate the strategy to ensure compliance with objectives. 
• Understand that infrastructure management is not the core of your business: You must adapt management to your company's specific needs. We could compare it to following a diet we found in a magazine to lose weight, instead of going to the doctor and creating a personalized plan with a health professional. In the first case, the diet can be generic and not adapted to each person's specific needs. Instead, in the second case, the plan is tailored to each individual and focuses on their specific requirements. This is what you should always seek: personalized help to manage your infrastructure, giving you the ability to focus on the core of your business. This way, you can be more productive and protect your investment. 

Examples of cost optimization strategies. The AWS case. 

As we've seen, cloud providers offer multiple tools to help you control your cloud spending. What are some of them? Let's look at the case of AWS (Amazon Web Services). This is a particular example of how cloud cost optimization tools can be applied. AWS offers a variety of developments that help users reduce costs and meet the objectives we previously discussed. Among the most important are: 

• AWS Cost Explorer A tool that provides insights into AWS spending patterns over time, enabling future cost prediction, identification of areas for detailed review, observation of reserved instance utilization, and recommendations for improvement. 
• AWS Trusted Advisor: offers real-time identification of areas for potential optimization. It provides recommendations for reducing costs, improving performance, and security for cloud applications. 
• AWS Budgets allows you to set custom budgets and receive alerts when costs or usage exceed the set limit, based on tags, accounts, and resource types. 
• Amazon CloudWatch: It is a tool that can collect and track metrics, monitor log files, set alarms, and automatically react to changes in AWS resources. 

 On the other hand, Azure also offers services like Azure Cost Management that allow for aligning cost and forecasting models by creating custom budgets. Furthermore, while optimizing costs, data security and protection must also be maintained as a priority. Cybersecurity tools like multi-factor authentication (MFA) are important for this. 

 Cloud Cost Management: Protect Your Investment 

In an increasingly digitized business world, it is essential to adopt effective strategies to maximize cloud investment. Efficient cost management, resource optimization, understanding agreements, and prioritizing security are critical components for achieving maximum value from cloud investments. Additionally, companies must recognize the importance of strategic planning, continuous agreement review, and leveraging technological tools to monitor, control, and optimize cloud spending. Close collaboration among IT teams, business units, and development staff is essential to ensure effective migration and sustainable management of cloud infrastructure. 

Furthermore, the use of specialized platforms and tools, along with the hiring of specialized talent, will allow companies not only to maximize their cloud investments, but also to enhance operational efficiency, agility, and innovation.

The most relevant point? As mentioned, you must understand that infrastructure management is not the core of your business: you must adapt your management to your company's specific needs. To do this, a cloud partner like Nublit is an invaluable resource.  

 Do you want to save money and get the most out of your cloud? 

Don't let costs skyrocket uncontrollably. The key to a successful cost strategy is to plan and prepare in advance. However, it's not easy to do it alone. That's why at Nublit, we offer you personalized advice from the top specialists in the field.  

Focus on your core business and protect your investment. We'll take care of the rest.  

Guarantee your customers' satisfaction and your business's sustainable future! 

Contact us now: www.nublit.com/conversamos