This content is part of the Essential Guide: Optimize your public cloud cost management strategy

Cloud spending doesn't need to be a guessing game

Shadow IT and tough-to-navigate cloud computing bills make it difficult for organizations to get an accurate picture of cloud costs.

As cloud computing adoption grows, IT departments still struggle to manage their cloud costs -- especially in hybrid or multicloud environments. For a variety of reasons, many enterprises find themselves with an incomplete picture of cloud spending, and, in some cases, are unable to determine if the cloud is actually reducing or increasing expenses.

Here are three tips to help trim the fat off your cloud costs as you head into the new year.

Avoid cloud billing surprises

Collecting and consolidating cloud billing information -- again, particularly in a hybrid cloud environment -- can be a challenge for IT teams. Initially, many businesses use tools from the cloud vendors themselves to simplify this task, but these tools are not always enough to help organizations consolidate and truly understand their cloud bills.

One reason for this is that cloud billing systems are relatively new and unsophisticated. And rather than being written so the customer can monitor costs, they are designed so the vendor understands its operation.

Progress, however, is being made. Third-party vendors -- such as ActOnMagic Technologies, Apptio, Cloud Cruiser, Cloudability, Cloudyn and Talligent -- have developed add-on billing tools, so enterprises can gain more insight into their cloud spending.

These tools can also help reduce expenses and uncover hidden costs. Typically, when an organization transfers data to the public cloud, it pays a fee. In some instances, the vendors also charge networking fees when data is moved between different virtual machines within the same cloud, such as during backup or replication. Businesses should be aware of these policies to more accurately track cloud costs.

Rein in wayward cloud users

One of the most common reasons organizations don't have a handle on their cloud spending is shadow IT. In fact, nearly 72% of IT managers don't know the number of shadow IT apps running within their organization, according to a 2015 survey from the Cloud Security Alliance.

Enterprises can be put at risk if line-of-business users deploy new cloud applications, generate sensitive data and then secure that data in a cavalier manner. In addition, some companies fall victim to hybrid cloud sprawl.

Even with cloud, businesses can buy more services than they need.
Jay Lymanresearch manager, 451 Research

"Even with cloud, businesses can buy more services than they need," said Jay Lyman, research manager for cloud management and containers at 451 Research, based in New York. For instance, he said, two line-of-business managers could buy the same cloud storage service without realizing it.

IT departments have been trying to rein in these processes. Gartner Inc. promotes the idea of bimodal IT, an approach where one data center group oversees traditional systems and a second group oversees cloud to prevent users from bypassing IT. 

Remember to turn off the lights

Since cloud computing allows businesses to spin up new services rapidly, it's beneficial to turn off cloud resources when they are no longer needed. For use cases such as development, organizations constantly spin up and tear down compute resources in the cloud. But it's fairly common for users to spin up these resources for testing, and then not take them down once testing is finished -- which drives up cloud costs.

Volume pricing is another way to optimize and reduce public and hybrid cloud spending. "Once they consolidate their billing, companies may see that they qualify for usage-based discounts," Lyman said.

Next Steps

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Watch out for hidden costs in your clouds

Dig Deeper on Cloud pricing and cost optimization

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