Cloud Cost Management

Without careful management, public cloud costs can quickly spiral out of control. Gartner research shows that 77% of companies have been “surprised” by incidents in which costs suddenly skyrocket and only 22% of infrastructure and operations (I&O) managers are confident that their spending in the cloud are under control.

Unexpected Cloud Costs can come in the form of bloated monthly bills that destroy return on investment (ROI), short-term spikes that halt critical projects, or erratic fluctuations that force the business into emergency budget adjustments.

Why do cloud costs behave differently than traditional data center costs? Because cloud usage is metered and billed on a “pay as you go” model, costs are therefore very sensitive to usage patterns. These patterns, in turn, can vary unexpectedly due to changes in business activity, human errors such as inefficient configurations and scripting errors, or even malicious external attacks that can create spikes in performance. use of resources.

Focus on the following three techniques to build cost resilience in your cloud.

  1. Map your cloud cost vulnerabilities. Group costs by business activity or application, and work with the business to determine which areas are most vulnerable to unexpected increases in cloud costs.

  2. Add “cost observability” to your cloud monitoring. Cloud cost observability is the ability to make accurate inferences about costs and financial impact from system events recorded in cloud logs.

  3. Develop a cost incident response plan. This is an emergency manual that every organization hopes it will rarely need to use: practical instructions humans will need to move quickly under pressure. As such, it should be simple, prescriptive, focused on realistic scenarios, tested and maintained.

Cloud Migration Cost Estimate

Each migration approach (see “What is cloud migration?”) has a different profile in terms of the types of costs and when they occur and there are a multitude of reasons why migration costs cloud migrations are derailed, from rushed app reviews to fees. Be sure to cost and monitor every set of key activities, from planning and monitoring to residual costs (sunk costs).

If you intend to contract for cloud migration or cloud operations, be mindful of potential costs that vendors place out of reach. Suppliers often know that these activities will be needed at some point and hope to earn additional revenue by charging additional fees once the project is underway.

Here are examples of jobs that are frequently “added later”:

  • Extra effort to “live migrate” critical systems

  • Creation and refinement of operational runbooks, including templates and automation scripts

  • Setting up backup and disaster recovery processes

  • Special configurations to meet regulatory compliance standards

  • Extensive system administration tasks “above the IaaS level” to maintain databases, PaaS application environments or migrated applications themselves

Preliminary estimates of these costs should be incorporated into the full cloud migration cost estimate, even if workarounds or alternative vendors have not yet been identified.