Cloud cost optimization during and after COVID-19

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Managing financial uncertainty is a significant challenge, even during the best of times. Today, two major factors drive the need for continuous cloud cost optimization — the evolving global financial conditions in response to the COVID-19 pandemic and the accelerating adoption of cloud usage.

As identified in the , organizations expect cloud spend to increase 47% in the coming year. This rapidly growing spend leads to challenges in forecasting, with respondents reporting they exceeded their cloud budget by an average of 23%.

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As cloud spend is growing, respondents are finding it difficult to ensure that cloud costs are optimized. Respondents estimated that nearly a third (30%) of cloud spend is wasted. As a result, 73% of respondents identified the need to optimize their existing use of cloud as a top cloud initiative for 2020.

Due to COVID-19, cloud use is accelerating, with more than half of organizations expecting cloud usage to exceed prior plans. Other organizations will see their cloud use decrease as their businesses are impacted by the pandemic. In either scenario, it becomes imperative for organizations to optimize cloud costs.

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On-demand cloud spend — unlike many other IT costs that are set in long-term contracts — can provide nearly instantaneous savings once idle resources are eliminated or overprovisioned resources are downsized. A focused plan for cloud cost optimization can yield significant benefits — often 20% to 25% savings in just a few months — and prepare your organization to manage cloud costs efficiently as cloud usage speeds up or slows down.

What can you do to achieve ongoing reductions in cloud costs? You can start by implementing the four best practices outlined below. 

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2. Reach for the low-hanging fruit first

The assessment should include a wide variety of optimizations such as getting rid of idle (“zombie”) resources; rightsizing overall resources and eliminating wasted PaaS services; deprovisioning unused storage; shutting down instances after hours; or identifying newer, lower-cost instances.

The results will help identify the low-hanging fruit, such as idle resources and unused storage you can easily eliminate; other optimizations, such as scheduling instances, may require more time. Going for easy wins is the first part of a comprehensive optimization plan that should clearly identify the appropriate levels of usage and spend once the optimizations are complete.

3. Understand how software licenses contribute to overall cloud costs

Traditional software license costs may contribute significantly to the costs of applications running in the cloud. Optimizing license use is an important part of cloud cost optimization.

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Cloud cost optimization is a continuous process, not a one-and-done event. Automation, which can constantly scan cloud environments to flag waste or do automatic optimizations, can improve the overall efficacy. Cloud usage and costs are growing. You can help ensure that your savings are, as well.

For more information, please download the .

is vice president of cloud strategy at . She has held executive strategy and marketing positions at a variety of enterprise software startups and public software companies.

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