Public cloud service providers want to oppose this rebuke. They point to the shared responsibility model, which says that when customers spend too much money, it is usually because they have created a deployment environment that is not cost-effective. It is a well-known fact that many companies often ‘move’ to the cloud without giving much thought to how inefficient these systems will be on their new infrastructure.
Let’s think about it this way. If someone were to put rubber tires on a horse-drawn cart and run it on the highway, wouldn’t the cart owners be responsible for the reduced speeds and increased operating costs, not the highway department? However, the situation is not completely one-sided, and cloud service providers are not without responsibility. Let’s take a look at what cloud service providers are doing wrong.
Complex pricing model
Intentionally or not, public cloud providers have created complex pricing structures that are nearly incomprehensible to anyone who creates cloud pricing structures every day, encompassing every possible use case. As a result, businesses often face unexpected costs. Many businesses complain that they don’t know how much they are paying and don’t know how to manage their cloud bills.
The solution to this problem is simple. Until cloud service providers simplify their pricing models, companies will need to designate specific employees as pricing structure experts. This staff can work with cloud experts and use cost calculators and other tools to help you navigate the complexities of your pricing model. Another option is a consulting service specializing in cloud economics.
However, companies are pushing back against the idea of incurring additional costs to determine the cause of excessive spending. Cloud service providers need to do much more to make their pricing easier to understand. Providing customers with the right facts and information gives them the power to change their plans, which benefits everyone. For example, let’s say the highway department knows that electric carts are 8.5 times more efficient than horse-drawn carts. The cart owner now knows for sure: replacing it will deliver full ROI in 1.25 years. With horse-drawn carts off the roads, road management and maintenance work becomes easier for highway departments. It can’t be anything but a win-win.
Overprovisioning and low resource utilization
Cloud service providers often encourage enterprises to overprovision resources “just in case.” Since companies are paying for capacity they are not using, this approach increases costs without increasing business value. When you ask customers why they provision far more storage or compute resources than their workloads require, the most common answer is, “The cloud service provider told me to do it.” Again, there is an easy answer. Companies must adopt a regular monitoring strategy to adjust resource allocation to actual demand.
Better cost management tools
Many cloud service providers offer cost management tools, but they are often too complex or lacking in features to track them effectively. Some companies use third-party tools to manage costs, but most companies pay what the cloud service provider asks them to do.
The answer to this problem is not so easy. Companies should adopt a regular monitoring strategy to ensure that resources are allocated in line with actual demand. You can also reduce unnecessary spending by implementing a rightsizing strategy and deploying tools to track and optimize cloud usage. Unfortunately, the tools and knowledge to develop monitoring strategies are currently lacking.
These tools are essential for businesses. Companies should take full advantage of the available features of their cost management dashboard to gain insight into their spending. Setting up spending alerts and periodically reviewing expense reports can improve financial oversight and compliance with budget constraints.
Cloud service providers also need to do better. Instead of pushing companies with problems, we should help them.
Limitations of Autoscaling Without Proper Governance
One of the great features of public cloud computing is autoscaling, so you don’t have to suffer from poor performance due to lack of resources or underprovisioning. However, autoscaling is often implemented without proper governance or purpose, which often leads to hefty cloud bills.
There’s a simple solution that many companies don’t know about: setting clear guidelines and thresholds for scaling efforts. This way, you can avoid the financial impact of uncontrolled expansion by constantly reviewing and adjusting policies to meet changing business needs and budgets. These parameters must be combined with a sound cost governance system. However, since cloud service providers’ systems are often insufficient, another route must be found.
Lack of transparency in service provision
Unclear service provision and associated fees lead to unpleasant bills. A thorough understanding of the services you use is essential. Companies should conduct regular training to ensure that their IT teams have a comprehensive understanding of the cost implications of various cloud services. Fully understanding the terms and conditions of a service will give you more information to make decisions. This is another area where cloud service providers need to improve transparency.
Addressing this cost trap requires a strategic approach to cloud management, which many companies avoid and cloud service providers do not encourage. By implementing informed and proactive strategies for complex pricing, optimizing resource usage, improving cost management, scaling control, and increasing service transparency, enterprises can significantly reduce wasteful spending and maximize the value of their public cloud investments.
The day of reckoning is approaching. Currently, most companies simply pay these inflated bills even if they are dissatisfied. A company’s problems must be solved by the company itself. And cloud service providers must become true partners. We must help customers use their resources in the most business efficient way. In the long run, helping customers will also help cloud service providers.
editor@itworld.co.kr
Source: www.itworld.co.kr
