COST CONTROL IN A TIME OF MULTICLOUD AND “CLOUD NATIVE”

Multicloud contributes to a small, clear cost picture and “Cloud native” technology does not make things easier. In order for this not to slow down development and success with the help of cloud services, it is important to rethink when it comes to cost analyzes, FinOps principles and customer-oriented value creation.

Guide: Multicloud Strategy

Multicloud solves many needs in many industries. Therefore, IT budgets continue to grow in this area. In Gartner’s latest investment forecasts, the arrow points down from $ 195 billion in 2019 to $ 190 billion in 2022 for traditional infrastructure investments. For cloud infrastructure services (IaaS), the forecasts show the opposite, with strong growth from USD 39.5 billion in 2019 to NOK 63 billion in 2022.

FORECAST CLOUD COSTS

When IT managers / CIOs incur costs of such dimensions, they have no choice but to meet the expectations they implicitly create. It is important to utilize the new technology for concrete value creation, and at the same time create a flexible, scalable IT environment. The environment must also have a sufficiently low user threshold for bands to customers to survive even in the event of unforeseen events of covid-19 dimensions.

Continuous cost analysis and optimization are an important part of this scenario.

There are now specialized analysis tools to optimize cloud costs. The tools map areas with potential for improvement, eliminate waste, ensure reserve capacity for dynamic tasks and facilitate predictive cost analysis.

The massive increase in the use of home offices and digital collaboration has sent cloud use straight up. The Flexera State of the Cloud 2020 report shows an average growth in the company’s cloud costs of 23 percent. The forecast is 47 percent for 2021.

Systems that themselves draw in more capacity as needed (so-called “migrating workloads” / capacity migration) contribute to this cost increase. To keep costs under control, capacity migration must be optimized. This is because many new elements come in addition to the work with ordinary cost management and IT management for maximum operational efficiency.

MORE EFFICIENT CONTROL OF CLOUD COSTS

By 2024, most older applications that have migrated to the cloud’s IaaS (Infrastructure-as-a-Service) will require optimization to be cost-effective, according to Gartner. This will lead to cloud providers building up their optimization capacity to be able to meet the needs of customers who have automatic choice of clouds and capacity migration as an element in their cost-effectiveness-oriented architecture.

At the same time, cost optimization has become a fundamental element in all cloud migration from the moment the company needs to identify what is profitable to migrate. Micro-service-based applications that are shaped for the cloud from the bottom up can perform better than traditional applications but can also create extreme complexity over time. Therefore, tools that link costs to specific performance targets become all the more important for maintaining cost control.

RESOURCE MANAGEMENT FOR TRADITIONAL APPLICATIONS?

Traditional applications do not automatically use cloud-based tools for analysis and consumption.

For such applications, it therefore becomes even more important to be able to identify unused and unrelated resources. Based on this, resources can be taken down manually or automatically. All too often, new services for a project of limited duration are run up with a certain amount of access to resources – and then forgotten. Then the invoices flow in without any use. Also make sure that different teams have a good overview so that they can manage their own resource use.

Through a management system where these steps are taken care of, you will be able to more easily follow the effect of new services when they are put into operation, also on the cost side. Connecting resources directly to the users provides a good cost overview. Also make sure you have control over where the data is, the value of these and their legal owners.

Some companies also tend to store useless data anywhere in the cloud. If you have not linked concrete data directly to performance targets, this can easily become a confusing and expensive affair.

Another way to reduce operating costs and increase flexibility is to use container technology to roll out and manage applications. It is important to do this correctly so that the effect does not increase complexity and cost.

NOTE! SPECIALLY FOR “CLOUD NATIVE”

“Cloud native” is an approach to create and run applications in the cloud in a way that takes full advantage of the cloud’s distributed delivery models. Such cloud native cloud solutions provide increased speed, agility and scalability – key ingredients for applications and services in our digital economy. However, cloud native cloud solutions require extra both in terms of economy and human resources.

The landscape is also constantly changing in line with access to new tools and methods. A successful introduction of Cloud native cloud solution and DevOps culture will depend on the company’s ability to choose the right methods and functionality, as well as a way of working based on specific performance goals. Achieving this may require top management approval, cultural development and mentoring budgets.

Cloud native also requires a different cost perspective. Companies that consider the cost side before the revenue side are unlikely to achieve the desired results and agility. Of course, they need cost control mechanisms, but if the cost screw is tightened too soon, it can hamper development and progression.

This is where FinOps comes in as a new concept for many. FinOps will handle the economic aspects of cloud use. The non-profit Linux Foundation works with the FinOps Foundation to promote this by establishing best practices, education and standards. FinOps will help ensure companies have an overview of cloud costs within the framework of effective DevOps.

CLOUD TRANSFORMATION MUST BE TREATED DIFFERENTLY

A transition to the cloud – and especially cloud-based technology including cost analysis and FinOps – can lead to a need for major cultural changes in the business. To put this in perspective, the transition is much greater than from mainframe to open source / open source. The reason is that cloud use is not just a technical issue but involves major changes in working methods and deliveries to the next generation of customers.

So, what does it cost to do something new in a world that is completely new to you? Well, calculations are among the most painful challenges that most companies face. Cloud transformation is not just about transferring current technology and data to another operating environment. It’s about reinventing oneself – delivering in a new way that hits the market.

The costs of this new everyday life are dynamic. Our best tip is to link them directly to specific performance goals. Then the return follows more easily.

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Sara Murby Forste
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