Telecom & Technology Consulting
In the quest to boost employee productivity, customer satisfaction, and corporate profits, tech leaders try to balance the need for innovation with the requirement to minimize costs. That means continually assessing where they can cut spending. Your cloud initiative is one of the best areas to investigate – in most organizations, it’s a huge source of wasted dollars.
Begin your cost-cutting imitative by defining your cloud strategy. This is critical – lack of a clear plan for deploying, maintaining, and expanding in the cloud is often the main reason for excessive costs. Conversely, a well-defined cloud strategy significantly reduces the risk of incurring unnecessary costs. A thorough cloud strategy also provides logical rationale for desired business results. And most importantly, the strategy ensures that key decisions align with organizational goals.
High (and unnecessary) cloud costs can be due to poor resource management and a lack of optimization. Each month you might pay for more storage or database capacity than you need. The problem: you’ve overestimated what’s required. While vendors can bear some of that responsibility, the client (you) must always remain proactive and measure actual usage in comparison to the resources you purchase.
Of course, there’s always the possibility for unanticipated expenses, especially those related to AI agents in the cloud. Your app development team may not have accounted for future memory and processing demands for cloud-based AI models. As a consequence, you’ll have to bring on outside consultants to optimize the models, which can cost tens or hundreds of thousands of dollars. Avoid this financial disaster by performing more accurate upfront planning.
Poor planning during a digital transformation can also lead to unnecessary cloud costs. Migrating to the cloud requires a complete understanding of workload requirements, as well as the ability to optimize database architectures. Not accounting for these functions may cause overprovisioning and the extra spending associated with correcting the issue.
Planning doesn’t only relate to specific technologies or initiatives – it also has to do with assessing cloud vendors. When comparing cloud costs, be sure to measure not only upfront pricing, but also operational efficiency and the pros and cons of vendor lock-in. For example, can workloads can be easily moved between vendors or scaled across different platforms? Perform workload simulations to get a sense of total cost of ownership for various scenarios, which should give you a better sense of the most financially smart solutions.
Choose wisely. Select the wrong cloud provider and you could endure years of throwing money away. Carefully review the potential vendor’s cost structure. Don’t assume that pricing is consistent from vendor to vendor. Let go of the belief that legacy systems can be migrated without cost increases. Analyze your organization’s workload needs and get crystal clear if the cloud provider’s architecture and services can accommodate – and grow with – your requirements.
Cloud services contracts, by their very nature, are complex and rife with contingencies. You require ample time to digest, interpret, and comprehend a contract’s arcane language and endless terms. You must precisely understand every aspect of the agreement, from exact pricing to design workloads, from data transfer fees to volume discounts. So who could blame you for any confusion and subsequent over-spending?
Yet you’re ultimately accountable if you’re overall could services costs turn out to be significantly higher than you anticipated and calculated. Which means many uncomfortable weeks (or months) at the office trying to explain the wasted spending to C-level colleagues and the board. Reducing cloud costs not only requires a strategic approach, it necessitates awareness of where you may be overspending. The money you save can then go towards other major initiatives. And that’s something you won’t need to explain to others in the conference room.
