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How To Optimize Cloud Spending Across Every Business Department

Cloud computing is the technology for enterprises to invest in today.


83% of enterprise workloads will be in the cloud by 2020 and it’s not far-fetched that figure will reach 100% in a few years from now. In fact, 94% of enterprises already use at least one cloud application in their processes.


The benefits of the cloud are endless. Cost savings, operational efficiency, and security are just some of the reasons why companies are spending billions on it.


However, are enterprises getting their money’s worth from their cloud investment?

The current state of cloud expenditure


The global public cloud market is expected to reach $258 billion this year—the figure was just over half of that less than 18 months ago. Cloud computing budgets are also growing 6 times faster than traditional IT spending according to a study by IDC.


It’s clear that businesses are ramping up their efforts and investments in the technology. However, the numbers don’t show the whole picture. A lot of the money spent does not actually produce any returns for enterprises.


Companies are wasting $14.1 billion every year on unnecessary cloud spending. This means 5% of cloud spend is essentially worthless. Though it may not seem much, enterprises have such tight budgets that a loss like this can negatively affect other departments.


Although tech spend is increasing in 2019, other business areas are facing budget cuts to keep up in today’s competitive landscape, where attracting new customers and maintaining healthy profit margins is becoming increasingly harder.


If the wastage continues, the budget cuts will eventually affect the IT department which ends up in companies having to skimp on their cloud infrastructure and suffer reduced operational efficiency to compensate.


That said, managing cloud costs is not just the sole responsibility of the IT team. Other business units using the cloud should also be aware of how much they’re contributing to the organization’s cloud computing budget.


How can businesses encourage cloud cost savings in their business units?


Have a transparent view of how each business unit is using the cloud


Accountability and transparency are the two key factors in ensuring no cloud usage goes to waste. Organizations need to know which departments are using the cloud, how they are using it, and for how long.


A lot of cloud waste comes from overprovisioning which happens when enterprises allocate too many resources in contrast to the actual usage level, causing employees to underutilize their cloud workloads.


This is so common in enterprises to the point that AWS customers overpay $6.4 million each year to excessive capacity.


A visual cloud management platform solves this problem by providing a visual overview of the amount of money spent on each cloud asset, as well as identifying how long companies have been paying for it.


These two details are extremely valuable in determining underutilized assets, thus cutting down on cloud waste in enterprises.


Streamline cloud applications among departments to minimize cloud sprawl


Cloud sprawl and shadow IT are two common culprits of cloud waste in enterprise cloud computing.


These two problems are particularly prevalent in organizations with poor application and device management policies. Affected companies may spend up to 40% of their tech budget on cloud resources they are not even aware of.


The solution to this scenario is to establish concrete and well-enforced policies on cloud applications and BYOD practices. Every instance or workload must be given permission before it can be used, while usage must be monitored to avoid wastage.


Easy asset discoverability


Underutilization is not the only issue related to overprovisioning cloud resources.


When organizations deploy too many cloud assets, it can overwhelm them to the point where they don’t even know what resources they own. They may even pay for assets that have never been used before!


Again, asset transparency plays a key role in preventing this from happening. With a visual cloud management platform, organizations can visualize all of their cloud assets and identify the asset dependencies as well as understand key metrics like usage and performance.

This enables enterprises to easily discover their assets and track which resource is performing up to expectations and vice versa.


An example of asset visualization in a visual cloud management platform like Cloudivize

Use balanced scorecards to gauge each unit's cloud use efficiency


Balanced scorecards are a great way to understand how each business unit is using the cloud.


Scorecards are usually used in strategic business departments (e.g. management) to measure and monitor progress towards achieving the department’s goals. Furthermore, the same concept can be applied to cloud usage.


With scorecards, organizations can track the efficiency of every department in utilizing cloud applications. Since scorecards are presented visually, it’s easy for managers or CFOs to assess if team members are using cloud assets within the organization’s allowed threshold.


How a visual cloud management platform like Cloudivize helps enterprises to achieve cloud cost optimization


The key to minimizing waste in cloud usage across every business unit lies in transparency, asset discoverability, and utilizing a technique like balanced scorecards to track efficiency among team members.


A visual cloud management tool like Cloudivize plays an integral role in enabling the cost optimization steps mentioned in this post.


Cloudivize gives businesses the visibility they need to identify wasted cloud usage by visualizing relationships between every AWS resource. Cloudivize also provides full asset transparency to help businesses discover hidden resources they’re paying for without their knowledge.

With Cloudivize, enterprises can allocate their budget more accurately as our platform tracks each AWS asset’s usage and performance metrics. This allows companies to understand how much they’re paying for each resource and for how long.


Request a demo today to find out how Cloudivize helps optimize cloud spend across all of your organization’s departments.


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