Cloud cost management (sometimes referred to as cloud cost optimization) is the process of analyzing and planning surrounding cloud infrastructure to ensure processes are working optimally. Cloud cost management makes it possible for organizations to better understand and manage the demands and costs associated with cloud technologies. It tends to involve finding the most cost-effective way to maximize cloud usage and efficiency. At the same time, cloud cost management also ensures that you are investing in the necessary areas to result in comprehensive coverage and are not going to have capacity issues. Ultimately, it’s about ensuring that you have the right balance between cost and service.
As cloud infrastructure becomes more complex and integrated, it becomes ever more difficult to keep track of spending and value for money. Most public cloud models operate on a “pay for what you use” model. In theory, this is great. It means that you are only charged for the technology and capacity that you use. With proper management, this can result in significant cost savings compared with a limited, subscription model. However, if usage is not closely monitored and managed, it is very easy for spending to spiral. You may be paying to store information that you either don’t need to store or is already stored on-premises.
So, it is important for organizations to ensure that they have oversight of their cloud strategy, ensuring that all spending is necessary and accounted for. This is where a cloud cost management tool is an invaluable asset.
In this article, we’ll explore the top cloud cost management solutions available on the market. We’ll look at the key features that they offer, including the ability to collect, consolidate, and visually present data to make choosing the best solution for your organization easier.
Everything You Need To Know About Cloud Cost Management Tools (FAQ)
What Is A Cloud Cost Management Tool?
Cloud computing is an immensely valuable and varied aspect of the modern enterprise environment. It allows enterprises to function more efficiently, work flexibly, and reduce dependence on on-premises infrastructure. However, as cloud services have become more embedded in the way we work, the need to ensure cloud capabilities are properly managed has only grown; businesses need to maximize the return on investments for these technologies and use them to their full potential.
Cloud cost management tools allow organizations to optimize cloud spending. These tools are designed to monitor, analyze, and manage the costs and usage across the cloud platforms that an organization uses. They can then provide insights, analytics, and control mechanisms to ensure they are being used efficiently and configured optimally.
Cloud cost management tools are particularly useful in multi-cloud or hybrid cloud environments. These environments tend to utilize services from various cloud providers and therefore will need help in managing their various financial outputs. As there are multiple services being used in conjunction, there is a greater chance for oversight and resources being used ineffectively; as businesses contend with increasingly dynamic demands, there is a tendency to over-provision resources such as memory, CPU, and storage, which can subsequently lead to a disappointing return on investments.
How Do Cloud Cost Management Tools Work?
Cloud cost management tools assess and monitor how organizations make use of their cloud computing tools. This allows them to gain valuable insights into how resources are used and whether that represents a good value for money and return on investment. They can help to ensure that resources are correctly optimized and working as effectively as they can be.
There are various factors that may result in organizations spending more on cloud services than they had accounted for. These may include:
- Memory and storage
- Virtual machine instances
- Training and support
- Network traffic
- Web services
- Software licenses
When you consider the amount of data that organizations deal with, it is understandable that some of this can fall through the cracks. It would be very difficult to keep track of every aspect of (possibly multiple) cloud services unless you have a solution to streamline this process.
A comprehensive cloud cost management strategy, aided by an appropriate cloud cost management tool, is an important way of effectively managing the financial aspect of employing cloud services.
What Are The Features You Should Look For In a Cloud Cost Management Tool?
A good cloud cost management tool will typically include the following capabilities:
- Data Collection – Your cloud cost management solution should connect to cloud providers and platforms via integrations or APIs. They can then gather all information relating to resource use, billing, or expenditure. In doing this they can gain insights into any virtual machines, databases, storage, networking, or other cloud service in use at the organization.
- Aggregate And Consolidate Data – By bringing together data from various cloud accounts, regions, and services to a single, centralized location, you can gain a comprehensive overview of cost and spending.
- Cost Allocation – Costs should be broken down by department, project, and team, allowing you to understand how resources are allocated and used. This makes it easier to attribute costs accurately and ensure all activities are budgeted for appropriately.
- Historical Data Analysis – Through assessing historical data, then comparing this with real-time statistics, you can identify patterns and trends. This will help you predict future usage and ensure you have the capacity to meet demands.
- Data Visualizations – To help explain the tool’s findings, there should be access to visual graphs, charts, and dashboards that clearly explain what is happening across your network. By presenting data in a way that is easily digestible, users can more easily understand cost trends and recognize any areas in need of changes. This also helps when sharing data with C-level executives – they may not readily engage with raw data but can easily make sense of a pie chart, for example.
- Spending Comparison – By comparing expected spend versus actual spend, you can understand how accurate your budgeting has been. This also allows you to set limits on cloud spending and (based on historical data) plan for future spending trends.
- Generate Custom Reports – With such extensive data analysis, the insights generated can be invaluable. Your solution should have a simple way of generating and exporting reports to detail specific metrics and projects to better inform decision-making and internal communications.
Overall, cloud cost management tools are an excellent resource for organizations looking to gain more visibility into their usage and efficiency. This has a direct impact on financial output and ROI. Through effective use of a cloud cost management platform, organizations can optimize their cloud resource usage and ensure that any decisions made regarding controlling and managing their cloud costs are as well-informed as possible.