Everyone wants a piece of the cloud. Statista predicts that cloud spend is expected to grow from $ 400 billion in 2022 to $900 billion in 2027. As an employee of a large software company, I’m a small part of the trend. At Micro Focus we have migrated, and are still migrating, most of our developer workloads to the public cloud. We’re contributing a droplet to that nearly half-trillion dollar well.
A big problem is that one-third of cloud spend is going to waste. Cloud vendors are more than happy to tell you all the ways you can cut cloud costs. But until you fully understand the variable spend model of public clouds, savings will be slow to come.
Fortunately, there is a way to cut cloud waste and control cloud spend.
Too Many Teams in the Cloud
The cloud is a vast and exciting place. Across the typical organization, multiple teams are using multiple cloud services and enjoying big benefits. Naturally those users want more of a good thing, so they demand more cloud services. And just like that, you’re facing wild complexity and uncontrolled costs.
For example, Engineering teams are generally empowered to provision cloud resources. But when those resources are not managed effectively, you wind up with cloud waste. Similarly, ITOps teams manage thousands of services in the cloud, where it’s easy to scale cloud services up or down. But if priorities are misaligned across teams and spend spins out of control, your budget will quickly run out.
At the same time, Finance or Business Operations teams are grappling with variable cloud spending budgets versus fixed CAPEX-based budgets. Variable spending gives you more flexibility to choose the most cost-effective services from the cloud based on needs. But it can be unpredictable and lead to overspending. Most of the time, teams are reacting to expenses already incurred.
What’s Being Spent and Who’s Spending It?
With multiple teams using multiple cloud vendors, it’s hard to know exactly how much is being spent and who’s spending it. Here are some common scenarios:
- Cloud vendors generally provide decent reports and invoices at the master-payer level or for individual accounts. That’s all good. But if you need to investigate what was spent and who spent it, cloud vendors can’t tell you because they don’t have visibility into your organization's structure. So you can’t easily map bills from multiple cloud vendors to your business units.
- Some cloud vendors offer budget overspend limits or anomaly detection Even so, it’s difficult to identify root cause or ownership in order to prevent future overspend. The information needed to analyze an anomaly is usually spread across multiple places.
- Cloud vendors recommend ways to reduce cost, avoid noncompliance, and protect nonsecure environments. But many organizations can’t or don’t ensure that account owners follow through with those recommendations.
Cut Waste and Control Spend with FinOps
According to Finops.org, FinOps is the practice of bringing financial accountability to the cloud spend model, enabling distributed teams to make informed trade-offs between speed, cost, and quality.
Micro Focus has a new FinOps solution called Hybrid Cloud Management X (HCMX). It can put a stop to unexpected cloud bills in three key ways:
- Real-time view and alerts of spend across all clouds. With HCMX, you can gain a complete, unified view of all your cloud spend. In addition to mapping the spend to projects, business units, and cost centers, you can identify idle, oversized, or overprovisioned resources.
- AI-assisted saving recommendations. With HCMX, you can lean on AI to auto-generate reserved instance management recommendations that save as much as 72%. By looking at past usage of public clouds, per each instance, and comparing pay-as-you-go with longer-term commitment prices, AI determines the most cost-effective cloud plan for your business.
- Self-service guardrails. With HCMX, you can proactively prevent costly surprises. For example, you can consolidate offerings from major cloud vendors into a single catalog, preselect configuration options for cloud users to choose from, and implement spend limits with warning alerts when overages are about to occur. Out-of-the-box reports will help you identify spikes and spend inefficiencies.
Imagine you’re an organization that spends $5 million per month on the cloud. If one-third of that is going to waste, then you’re losing more than $1.5 million. That's too much. With a FinOps solution like Micro Focus HCMX, it doesn't have to be that way.
To read more about HCMX, go to www.microfocus.com/hybridcloud.