12 ways to maximize your cloud investments

“In the current economic environment, customers may have a unique opportunity to secure more flexible and favorable contractual terms,” Aronchik says. “To do so, IT organizations should build time into the process for reasonable engagement with several cloud providers on a competitive basis, or a single cloud provider with a reasonable opportunity to pivot to an alternative solution if needed.”

Read the fine print

The value of a cloud contract is not fully represented in the fee schedule. What the customer may assume to be “permitted use,” the cloud provider may deem “excess use” or an “overage.”

“To maximize total value of a cloud contract, IT leaders should look for contractual and technical clarity on the metrics that are used to calculate relevant fees, reliable tools for monitoring consumption, and the methodology for addressing actual or potential excess use,” says Aronchik.

Beware of minimum commitments

It can be tempting to agree to certain volume or spending levels to secure deeper discounts for ongoing cloud usage. But it’s one of the leading causes of stranded value in cloud contracts.

“It’s important to not overcommit on the minimum commitments,” Sealock warns. “This often depends on an enterprise being able to accurately predict how much of their premise-based footprint they can actually migrate to the cloud and at what rate.”

If an IT organization runs into issues that delay or prevent moving on-premises systems to the cloud, and thus miss a minimum commitment, there will be costs involved. “Longer term commitments, use of ‘sticky’ native services may drive larger contract discounts but also impact your technology plans,” says Sealock.

Leave no cloud stones unturned

There are a number of internal factors that can impact cloud value realization. “Challenge your IT department to pull all levers for efficient cloud usage,” advises Sealock. There may be an opportunity to refactor applications to make them more efficient users of cloud resources, adopt cloud native services instead of lifting and shifting existing system to IaaS, or move to SaaS options as part of ongoing application rationalization.

Increasing the focus on application modernization is crucial to extracting the full value of cloud, says Ranjan.

Invest in a cloud management platform

Real-time visibility across the cloud environment goes a long way in preventing unexpectedly huge bills from cloud providers. But “cloud pricing and ordering options are at a sufficient level of complexity that it is beyond the capacity of a ‘smart person with a spreadsheet’ to manage effectively,” says Sealock.

There are numerous cloud cost management tools on the market from established players and startups alike. These tools should have real-time interfaces to the cloud service providers’ pricing engines and be able to automatically match the enterprise’s cloud usage patterns with the right cloud services (e.g., IaaS, PaaS, native) and configurations (e.g., service instance type/size, storage tier). Sealock advises evaluating multiple platforms, looking for the following attributes:

• Financial (in addition to technical and operational) management capabilities
• Integration with automation tools for orchestrating technical deployments
• Capacity to pull usage from both cloud and on-premises environments
• Ability to model what on-premises environments would look like (and cost) on multiple clouds
• Engineering support to ensure the tools remain properly configured over time

Secure scarce cloud management talent

“Cloud pricing can be very complex and dynamic and is highly dependent on usage,” says Sealock. Without the proper governance, unnecessary costs can quickly accumulate. Adopting a cloud management platform is step one, but these tools are themselves complex. IT leaders must also recruit technology professionals who know how to use cloud management platforms to continually refine cloud service usage to meet enterprise SLAs at the lowest costs.

Enterprises  are seeing premiums for cloud skills outpacing those for standard IT infrastructure skills, according to research by Everest Group.

“Cloud expertise is in short supply, but without in-house experience it is difficult to avoid the wasteful pitfalls,” Sealock says. “Invest in the people to use the cloud tools properly who can also design the policies, processes, and procedures of a cloud governance framework.”

In some cases, IT leaders will create a cloud center of excellence that can be leveraged across multiple lines of business. 

Get serious about demand management

Ease of use and self-provisioning are two of the big benefits of using the cloud, but they also open the door to unmitigated (and sometimes invisible) cloud sprawl. IT organizations must create and communicate clear policies and processes for cloud demand management.

“Training can be used to increase the socialization of the policies and processes to users, but good compliance also requires those policies to be enforced within the programmed workflow of the tools,” says Sealock, who suggests putting some teeth into demand management. “Communicate top down that there will be smart constraints on cloud usage that will be reinforced via training but also codified in the workflow of their systems.”

Address overruns right away

Some IT organizations may view cost overruns as inevitable. But ignoring them is a mistake. “They do not get better on their own,” says Sealock. “It takes action to change the dynamic.”

Unexpected — or worse, inexplicable — cloud costs are a red flag. Understanding the root cause of the usage and addressing it as soon as possible is important. “You do not want to discourage cloud usage, but you must insist that the usage be smart, deliberate, and cost-effective,” Sealock says.

Continuously monitor and measure cloud value

Having clearly defined SLAs to measure performance against expected value is crucial. “Unless enterprises have a well-built process to continuously monitor and measure value against their stated goals, they will slip off in their transformation journey,” says Ranjan.

Cloud vendors, consultants, and other partners are likely to keep pushing more cloud, but its critical for IT leaders to periodically re-evaluate the cloud march to ensure the organization can achieve the intended value.