How to reduce IT costs while moving your company to the cloud


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Organizations are getting leaner day by day. The cloud is replacing on-premise software applications in several industries at a rapid pace. As organizations leverage the cloud infrastructure, they see a reduction in the cost and an increase in organizational flexibility. When they are on the cloud, businesses become more agile – as data can be accessed across geographies and through multiple mobile devices.

The cloud, however, comes with its own set of challenges. Applications on the cloud require added monitoring. A multi-cloud environment often requires real-time analysis. This implies that IT managers need a tool that provides global visibility into cloud usage to properly monitor the company’s cloud activities and spend.

Cloud service providers generally offer a variety of plans that offer different levels of discounting against different time commitments (lock-in periods), ranging between 1-5 years. These options include enterprise agreements, reserved instances and savings plans. However, most cloud customers are charged for the resources they order, irrespective of them using the features or not.

The IT manager can employ some effective strategies for optimizing IT expenses:

1. Locate Unused or Unattached Resources

Unused or unattached resources are low hanging fruits for the IT manager to locate and discard. More often than not, an administrator may forget to remove storage attached to processes they terminate. A developer may make a temporary server to perform a task, and then forget to turn it off when his work is completed. In both the instances the organization’s cloud bill will include the charges for the resources, irrespective of the fact that they are no longer used. In order to optimize cloud cost, it is thus necessary to start by locating unused and completely unattached resources.

2. Identify and Consolidate Idle Resources

Companies are billed for 100% of the computing capacity on the cloud, and hence, CPU utilization of 1-3% during an idle session, is a significant waste. An effective strategy would be to identify such occurrences and consolidate the processes so that idle sessions are minimized. Cloud offers autoscaling, load balancing, and on-demand capabilities that allows the organization to increase/ decrease the computing power any time they need to.

3. Derive the ‘Right Size’ for the computing services

Right sizing implies that computing services have been modified to their most efficient structure by modifying them as needed. IT managers have the option of choosing between different server sizes. They can also have the servers optimized for memory, database, computing, graphics, storage capacity, throughput, and more. Right Sizing helps the organizations make the best possible use of the resources they are paying for.

4. Follow and utilize Heatmaps

A heat map is an essential tool for optimizing cloud cost. This visual tool shows the peaks and the troughs and this data is crucial for establishing the start/ stop times of applications. For instance, an analysis of heat maps can indicate whether development servers can be safely shut down on holidays. While this could be done manually, a better option is to leverage automation to schedule instances to start and stop, optimizing costs.

5. Get the appropriate type and level of discounts

Once the above mentioned steps have been covered, the IT manager would have a clear picture of the cloud costs that the organization would incur. In the next step, he can determine the correct form of implementation he may need and start negotiations with the vendors. To have a granular control over the expenses, he may want  to go ahead with a plan which lets the organization pay for the exact usage till he has an understanding of the costs.

Enterprise discounts are locked in for a period of time and thus offer lesser flexibility. The Microsoft EA or AWS EDP programs are examples of such arrangements. Alternatively, there are standard discount options, like the reserved instances or savings plans, which can be purchased at any time.

6. Monitor software licenses

Software license costs for some applications apportion for a sizeable share of the cloud cost. To cite an example, if the organization brings Microsoft Windows or SQL Server licenses to the Azure cloud, it can realize significant savings on the cloud bill through the Azure Hybrid Benefit.

Some applications, on the other hand, may have restrictions while they are running on non – native clouds, like Oracle database licenses.

To conclude, the increase in cloud usage requires us to concentrate on being prudent and focused. Tools provided by OpenLM monitors software usage in cloud, on-premise, and hybrid environments. Detailed reporting facilities in OpenLM offer valuable insights which help during optimization exercises.

Would you want to optimize your cloud expenses by monitoring your software licenses? Visit us for a 30 day free trial of OpenLM with full features.

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