Jan 08, 2020

8 Must-Dos for Cloud Cost Management in 2020

The cloud is your ticket to fast, flexible, and ready-to-use software and infrastructure solutions. And though you may never worry again about having enough servers, if you don’t keep your cloud licenses under control, those happy clouds could turn into cost hurricanes.

Follow these eight cloud cost management must-dos to find out which cloud licensing model best fits your business needs.

Checklist for cloud cost management

1. Know how much cloud you use, so you can “right-size” your subscriptions

Knowing how much of the cloud you use can help you decide on the best cloud licenses. Usage is based on many metrics such as:

  • the number of per user licenses
  • disk space and storage space
  • the number of servers or instances
  • number of processes
  • size of database and number of database queries

Each of these usage metrics can be tracked with a SAM tool that gives you an accurate picture of current and projected needs.

2. Build a business case to identify the problems that cloud can solve

Start your cloud migration by identifying the problems that cloud services can solve. Do you need more ad-hoc computing power? If the answer is yes, then knowing how much and how often you need that power can help you decide between pay-as-you-go and pay-by-instance licenses. Or do you need software programs that can be installed on-premises but are also available on the go? Then a hybrid cloud option might be the best fit.

Figuring out a business case for cloud cost management will help you analyze your current infrastructure, platform, and software concerns, and guide your organization in making the right license purchasing decisions.

The Cloud drives your business, but is it also driving up costs?

Read the latest research from The ITAM Review, How to Build an Effective Cloud Management Practice: Strategies, People, Processes, and Tools.

Get the White Paper >>


3. Make your cloud move cost-effective by using what you already have

Whether you’ve already migrated or you’re thinking about it, your existing terms and conditions with a vendor might give you pricing advantages. Make sure you know exactly how to use your existing contracts to your advantage.

For example, Microsoft customers who have purchased three years of Software Assurance can move to the cloud at a lower price.

4. Set storage, server, instance, and virtual machine usage with capacity management

When you migrate to the cloud, make sure that you’re paying for only what you will need and use. The size and number of your servers, instances, and virtual machines will vary depending on your needs. For instance, consider whether you can redistribute your cores to fit in different sized and potentially cheaper instances.

Don’t pay for 100% of a server if you’re only going to use 30% of it. Figure out in advance of your cloud migration exactly how much server space you’ll need, and make sure to pay just for that.

5. Decide when to run cloud servers with more capacity management

If your cloud servers and instances don’t need to be on during certain times of the day, then get a cloud license that will allow you to turn them off or spin them down. Shifting consumption to off-peak hours can save money in the long run.

Capacity management can also result in refunds. For instance, Google Cloud Platform customers are entitled to a refund if their cloud resources are not available in accordance with their Service Level Agreements. Regularly reviewing your downtime logs can help to recoup costs for any violation of the SLA.

6. Avoid unnecessary purchasing by re-harvesting cloud licenses

When employees leave the company, or if they no longer need regular access to a cloud program, their existing licenses should be deactivated. This is software license re-harvesting. It prevents people from gaining access, returns usable licenses to the library, and makes them available for allocation to other employees. Instead of buying new licenses, you can better manage the ones you already have.

Many organizations encounter this licensing challenge with Salesforce license management. Employees change roles or jobs, but they continue to have an assigned Salesforce license. If someone else needs a license and there are none available, then new licenses need to be purchased. By using cloud cost optimization techniques like re-harvesting licenses, you will save money by eliminating unnecessary license spend.

7. Always know who is making purchase with a central license overview

Maintain flexibility without losing financial oversight. A key factor in successful cloud cost management is having a central license overview to help track which business unit is using and purchasing licenses. Use that information to decide how to better budget for license purchasing, and to make sure licenses aren’t being wasted.

For example, Business Unit A has 15 unused Salesforce licenses, and Business Unit B needs 23. Unit B can take the 15 unused licenses from Unit A and only needs to purchase 8 more. Without a central license overview, the organization would have wasted resources on licenses it didn’t need.

8. Engage more stakeholders to avoid shadow IT

The cloud gives business units significantly more flexibility in purchasing and deploying the latest solutions and apps. But if these purchases aren’t recorded and managed, they can recede into the shadows, becoming a hidden drain on your resources. Effective cloud cost management expands beyond central IT to include to all business units to get an overview of their spending on cloud apps.

Armed with broader stakeholder engagement, your Software Asset Management program can shine a light on the darkest corners of your cloud spend.

How to Build an Effective Cloud Management Practice: Strategies, People, Processes, and Tools

Learn how to minimize Cloud Shock – the unexpected, unbudgeted cost increase from delivering IT services via public cloud. Read the latest research from The ITAM Review.

Get the White Paper >>

Topics: Cloud, SaaS, SAM Education