Currently, IT teams are moving a mile a minute in their cloud-enabled environments, and for many, the pennies are starting to add up. The average U.S. business predicts it will spend $1.8M on the cloud in 2017, and organizations with more than 1,000 employees predict they will spend $10M or more. And shockingly, RightScale estimates 30 percent of that cloud spend is ultimately wasted.

These numbers are only going to rise as cloud adoption rates continue to skyrocket. This is a major pain point for IT teams globally, who know that their workloads are not optimized for cost savings, but don’t know how to tame the beast. To stay ahead of the curve, businesses need to adhere to a cost-saving cycle: Planning, tracking, optimizing, reducing. These four steps are the keys to taking full advantage of the cloud, without breaking the bank.

The first step is planning. This involves setting a budget, making decisions about what cloud resources are needed, and thinking about how the larger IT objectives will drive business goals forward. When in the planning stages, there are several key questions businesses need to ask themselves. For example: Is the budget I’ve set too high, or too low? How will my environment scale over time? Will the resources I’ve allocated meet my requirements? Can I allocate costs back to different lines of business?

While the price of entry into the cloud may be low, it’s very easy for cloud costs to shoot up if an organization hasn’t addressed these questions, and doesn’t have a solid strategy and deployment plan in place. For businesses that are venturing into the cloud for the first time, this stage is particularly vital. Without going through the process of choosing the right cloud resources, setting a budget and solidifying a deployment strategy, organizations will see their cloud costs quickly begin to rise. Finally, make sure you define your organizational structure and have a way to allocate costs. This is very important, if you are able to delineate where the costs are coming from, it will help you optimize and reduce costs in the future.

Once a business has executed on its cloud deployment plan, it needs to begin tracking its cloud performance. As many cloud platforms function on a pay-as-you-go model, it’s essential that IT monitor consumption levels using a tracking mechanism. As many IT teams have learned the hard way, unnoticed changes in consumption levels often have dramatic effects on monthly bills.

The key to the tracking phase is increased visibility. To fully optimize a cloud environment, IT needs to fully understand how it is functioning on a micro level. By using tools that increase visibility, IT teams can make informed decisions and gain predictive insights into their cloud environment. Once cloud consumption data is pulled, IT can then use that information to make more informed decisions in their next planning stage, including resource allocation and budgetary updates.

Optimizing & reducing
Optimizing and reducing go hand in hand.

Once a business has their cloud strategy in place and are able to track its success, it’s time to optimize. Optimizing entails carefully assessing the tracking results and asking key questions such as: What parts of my environment are underutilized? What parts are costing the most money each month? What resources can I combine? This process is critical to the cost savings cycle. By fully digging into the tracking results, IT can find the pain points within their environment that are boosting their cloud bills. Understanding how different lines of business are consuming the cloud will help you figure out ways to optimize by collaborating with the stakeholders.

When a business has a solid understanding of how to best optimize its environment, it can begin to reduce. When IT knows what resources are underutilized, they can combine them within other underutilized areas. This process ensures that the monthly cloud budget isn’t being eaten away by unnecessary resources and that an organization is seeing the full benefits of their cloud adoption.  

And repeat
Many businesses think that cloud deployment is a one-and-done process. However, this attitude is one of the biggest factors in rising cloud costs for organizations. Depending on the size of the business, this cycle needs to be repeated on a yearly, quarterly or monthly basis. A company’s cloud plans often need to be revisited as organizations grow and business goals change. As plans are re-assessed, tracking tools need to be closely monitored to help inform the planning stages, so IT knows what is and isn’t working. And of course, this data will be used to repeat the optimization and reduction process. And then the cutting cloud costs cycle begins again.