When it comes to lowering costs, boosting employee productivity and improving business efficiency, the cloud is a holy grail for small and medium-sized businesses.
Over the last ten years, the cloud has completely transformed how we conduct business: altering how people communicate, collaborate and store data.
In line with this, Gartner predicts that global spending on cloud services will reach over $482 billion in 2022, up from $313 billion in 2020.
With so much to offer, it’s no wonder that so many SMBs are reaching for the clouds. In fact, a McAfee study found that companies that take advantage of the cloud experience a 19% increase in process efficiency and a 15% reduction in IT spending.
However, these benefits can only be realized if you use the cloud correctly. Unfortunately, it’s easy for cloud spending to spiral out of control, undermining the whole point of moving to the cloud in the first place: lowered costs.
Many business leaders have had the horrible experience of opening up a bill from their cloud provider and seeing more zeros than they expected.
There’s a lesson here. To truly benefit from the cloud, SMBs need to ensure they are budgeting correctly.
Managing cloud spend: the hurdles
In theory, the cloud should be a cost-saver, but the amount of money you spend can quickly become uncontrollable.
While most cloud providers offer solutions that help companies keep track of their cloud spending, these tools aren’t automatically included when you start using a service. This leaves it up to the company to use its own resources to ensure that cloud spending doesn’t get out of control.
What makes things more complicated is that most companies use cloud services from a host of different vendors, making it hard to see what is being spent where.
As well as this, many companies don’t have a strategy for cloud spending at all. Gartner found that less than one-third of organizations have a documented cloud strategy. They tend to use the cloud as they go, but this lack of planning can quickly end up in a hefty bill.
Moreover, the cloud’s agility and flexibility can be harmful. Companies can scale up their cloud usage with a click of the fingers, making it very easy to ruin budget forecasting efforts.
We often see companies scale up their resources and then forget about them, leaving redundant instances that they are paying for but aren’t actively using.
These risks aren’t to put you off using cloud. What’s needed is a strategy. In the same way that you budget for other business areas, you must create a cloud budget. Here’s how to do it.
1. Opt for reserved instances
As we’ve discussed above, the pay-per-use cloud model can lead to swelling costs. If you want to better manage your cloud spend, reserved and spot instances are better options.
With a reserved instance, you commit to using a certain amount of capacity over several months. These instances usually come in at half the price of on-demand storage.
2. Start capacity planning
Scaling up and down quickly with the cloud is great for SMBs – but this process needs to be managed correctly to ensure that employees don’t unintentionally go over your spending cap.
The good news is that there are solutions to help with this issue. All of the leading cloud providers offer autoscaling resources, which allow you to avoid paying for cloud capacity that you don’t use.
3. Limit data transfer fees
Uploading and downloading data to the cloud isn’t free. Cloud providers charge a fee to transfer data from their platforms and to different regions.
While some data transfers are unavoidable, you should make a concerted effort to ensure that only necessary data transfers occur.
4. Utilize cost monitoring tools
You can use a range of forecasting tools to predict your cloud spend. These tools work by analyzing your past cloud usage to predict what your cloud spend should look like.
When you reach your spending cap, they will then send alerts to your IT person or outsourced IT provider.
If you’d like assistance with taking advantage of these tools, speak to our IT support team, who will be happy to discuss the options with you.
5. Stop cloud sprawl
Cloud sprawl refers to cloud applications and storage that you are paying for but no longer using.
Eliminating these instances is a simple and effective way to reduce your cloud spending – as long as you know where your redundant applications are.
We recommend using application monitoring and management tools to gain visibility over your cloud environment to see what is being used and what isn’t being used and adjust your strategy accordingly.
Need Help Optimizing & Securing Your Cloud Usage?
Carl’s Computer Care can help your Louisiana business get a handle on your cloud file storage to ensure your data is both secure and easily searched.
Contact us today to schedule a consultation! Call 225-315-3498 or reach us online.