Moving IT operations to the cloud offers several advantages for companies. One of the more lucrative benefits is saving money. By using cloud services, companies can add resources without having to make large capital investments. Plus, they can eliminate the need to maintain and manage some areas of their IT environments, thereby saving money.
However, many companies aren’t saving as much money as they could be. In a 2018 survey, 57% of companies reported exceeding their cloud service budgets, while a 2019 report found that businesses waste 35% of the money they spend on cloud computing.
Why companies overspend
Companies don’t intentionally set out to spend more money than necessary on cloud services. Common reasons for overspending include:
- Businesses don’t fully comprehend their cloud computing needs, which can lead to overprovisioning. For example, companies that don’t have a firm grasp on how much data they generate and store might end up paying for more storage space than they need.
- Companies don’t fully understand cloud service providers’ pricing structures. The pricing structures for cloud services aren’t standard across the industry. Plus, providers typically offer numerous pricing plans and options. Not understanding the pricing details can lead to companies failing to select the best provider and the most cost-effective plan for their business operations.
- Organizations don’t optimize their systems before moving them to the cloud. For instance, companies that don’t get rid of unnecessary duplicate data can end up wasting money on storing it.
How to avoid overspending
To avoid spending more money than necessary on cloud services, you need to look inward at your IT operations before looking for a cloud service provider. A good place to start is to gather information about the application or IT system you want to put in the cloud. For example, if you’re moving an IT system to the cloud, you need to identify all the hardware, software, and services running in the system and determine their computing, storage, and networking requirements. Creating a dependency map is also important to show interdependencies.
When determining computing, storage, and networking requirements, you shouldn’t rely on “guesstimations.” They can lead to overprovisioning, which will squander your cloud services budget. Instead, you have to accurately assess the requirements. You also need to analyze performance and usage patterns to determine current and future capacity needs.
Knowing this information will help you determine the best cloud configurations to use. It might even reveal that moving an application or system to the cloud isn’t a good idea. For instance, a legacy application might be better left on-premises because of the complexities and resources that would be required to put it in the cloud.
This information can also identify underused and overused computers and resources. Plus, it might reveal duplicate resources, such as identical data being stored in two separate locations. You can save money by resolving these problems and optimizing your application or IT system before moving it to the cloud.
When you’re ready to start looking for a cloud service provider, you have to be equally diligent to find one that best meets your company’s needs at the most suitable cost. For each provider being considered, it’s crucial that you understand the available cloud service plans and options, including their costs. Finding out exactly what is and is not covered in each plan and option will reveal any hidden fees. When comparing the costs, you should base your estimate on your specific configuration. Only then will an accurate comparison be possible.
Time-intensive but important steps
Assessing cloud-bound IT operations and evaluating potential cloud service providers takes time, but these are important steps if you want to maximize your cloud services budget. To save time and effort, you can use a cloud assessment service like the one Synoptek offers. This service can help you determine the best cloud configurations and cloud service provider for your business.
Need help assessing your environment in order to consider a cloud migration? Contact us today for a cloud assessment.