RightsScale recently released it's 2017 state of cloud report. At CarverTC , we've been going over the findings to see what trends, and insights we can find, and we've found quite a few. We've found an interesting correlation between the rise of multi-cloud environments and sudden increase in concerns over cloud costs. Organizations' are running more workloads, in more cloud vendor environments. While we believe multi-cloud environments are a good thing, and are here to stay, adding and integrating cloud services is a complex task. It requires thoughtful vendor evaluation, planning, and implementation steps that include both direct and indirect integration with both on-premises services and other cloud services. Some of the rise in cloud costs may be a result a failure to properly evaluate vendors and plan implementation and integration. We'll lay it out for you in this article.

Multi-cloud is the Defacto Standard

Whether you use public, private, or hybrid implementations to support the different workloads in your organization, the odds are you will use multiple cloud vendors to provide different services, and support those different workloads. From the RightScale Report:

"Cloud users were running applications in 4 clouds and experimenting with 4 more. Companies that use public cloud are already running applications in an average of 1.8 public clouds and experimenting with another 1.8 public clouds. While fewer companies are using private clouds, those that do use more, running applications in an average of 2.3 private clouds and experimenting with an additional 2.1 private clouds."

Even more than that, those surveyed run the majority of their workloads in the cloud. From the report:

"Companies now run 79 percent of workloads in cloud, with 41 percent of workloads in public cloud and 38 percent in private cloud. It’s important to note that the workloads running in private cloud may include workloads running in existing virtualized environments or bare-metal environments that have been “cloudified.”

"Enterprises run 75 percent of workloads in cloud with more in private cloud (43 percent) vs. public cloud (32 percent). SMBs run 83 percent of workloads in cloud with more in public cloud (50 percent) vs. private cloud (33 percent)."

It's clear that organizations like having a choice of vendors, and like choosing the solutions that best fit their needs, even as more workloads are moving to the cloud. This means the intricacy of evaluating cloud vendor solutions and integration options will rise as each organization's cloud footprint becomes more complex. Selecting the right solution, and developing a plan for integrating to achieve business goals, and keep costs down will be essential.

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Managing Cloud Costs is Now a Significant Challenge.

Security and the ability to find cloud expertise have been at the top of the list of cloud challenges year after year, but this year, cloud spend joined them at the top of the list. From the RightScale report:

"This year expertise, security, and spend were all tied for the top challenge with 25 percent of respondents citing each as a significant challenge."

In fact, as an organization matures, the top concerns shift from security for cloud beginners to cost management for organizations whose cloud presence is maturing. From the RightScale report:

Business as Usual Won't Address Cost Concerns

Some of the more troubling information in the RightScale report indicate that, while organizations' are looking at costs, and are concerned about costs, they don't have a well-defined path to addressing the problem. From the RightScale report:

"Even as managing cloud costs becomes a top challenge, cloud users underestimate the amount of wasted cloud spend. Respondents estimate 30 percent waste, while RightScale has measured actual waste between 30 and 45 percent."

Along the same lines, Rightscale noted:

"Despite an increased focus on cloud cost management, only a minority of companies are taking critical actions to optimize cloud costs, such as shutting down unused workloads or selecting lower-cost clouds or regions. This represents an opportunity for increased efficiency and increased savings."

Despite this, "optimizing cloud costs is the top initiative for 2017 across all cloud users (53 percent) and especially in mature cloud users (64 percent)."

The disconnect between assumed and actual wasted cloud spend, and the fact that so few organizations have put measures in place to manage costs, and mitigate cloud overspend begs the question of, "why?"

The answer to this question leads us to believe that business as usual won't address cloud cost concerns. If cloud administrators don't know how much cloud spend is wasted, they either aren't measuring or don't have the skills to. Quite probably both. It is also likely that organizations didn't do proper vendor evaluation when selecting new cloud services, and did not plan service implementation with an eye on both functionality and cost mitigation (as well as other essentials such as security and compliance). Depending on how some cloud solutions are implemented and managed alongside other cloud services, making radical changes to bring down overspend post implementation may be complex, time-consuming and costly.

Training Is an Essential Element in Cloud Cost Control

It's simple. Anything that is properly evaluated, planned, and implemented from the start will be easier to manage and less costly in the long run. Too many organizations are realizing they need to implement cloud cost controls after they're in the cloud and their cloud footprint is growing. It's also apparent by the lack of action, despite the concerns, that staff may not have the skills required to bring cloud costs under control.

Training is essential to bring skills to IT staff to address this rising concern. The CloudMASTER cloud computing classes offered by CarverTC addresses key areas of concern illustrated by the RightScale report including:

Cloud vendor evaluation
Vendor cost comparison
Resource utilization measurement
Automated provisioning and deprovisioning (which can automate cost savings)
Management tools and services (yes, like Rightscale, as well as Chef, and Puppet).

More than that, CloudMASTER Training is vendor neutral, providing hands-on experience with over 20 platforms and tools. This gives staff real experience, using the tools. They'll come back from CloudMASTER training better prepared to make thoughtful comparisons between solutions and to find the best solutions, that will meet your needs, and keep costs down. If this problem concerns you, check out our class schedule, or contact us to discuss the courses that will get your team the skills they need to get cloud costs under control.

CarverTC provides IT training and certification in Portland Oregon and throughout North America.