How to drive lower cost with Cloud

CXO THOUGHTS
Officer_VishalGupta320x320 How to drive lower cost with Cloud
Vishal Gupta, Global CTO & SVP-Technology, Unisys

Many organizations are migrating to the cloud. That makes sense because the cloud offers greater elasticity and agility, new capabilities and the ability to pay as you go.

Cloud adoption strategies frequently operate on the assumption that they will also lower costs. But when organizations move to the cloud, costs often increase because they now cover both cloud requirements and internal data centers, which organizations continue to operate.

By employing the right strategies, organizations can make their cloud journey more cost-efficient. And they can ensure they’re getting the value they want from the cloud.

That’s why businesses embracing the cloud need to address:

  • Application and data center migration
  • Cost visibility and controls
  • Security and compliance

Make A Migration Plan

According to IDC, “Spending on off-premises cloud IT infrastructure will grow at a five-year compound annual growth rate (CAGR) of 10.8%, reaching $55.7 billion in 2022.” Public cloud data centers will account for nearly 84% of that, growing at a 10.6% CAGR.

But while there’s a move to the cloud, on-premises applications and assets aren’t going away. That creates the “double bubble” challenge. Most businesses aren’t able to pop their on-premises bubble completely. But they can shrink it over time by getting out of their own data centers.

That entails making a plan to sell off or shut down their legacy equipment and locations. Say a business has 40 data centers at the outset of its cloud effort. The strategy might be to have just five data centers once the cloud effort is complete. By creating such a plan, the organization can optimize spending in the interim and beyond. The key is to ensure that there are no stranded assets or legacy applications holding up the closure or sale of a given data center so the savings can be realized as soon as possible.

Organizations’ public cloud providers may be able to help with that. Many cloud service providers are happy to buy out their customers’ data centers. Cloud companies are typically working to expand their own capacity and may want the added resources.

Gain Visibility

That’s not as simple as it may sound. On-premises and cloud are two very different worlds.

In the on-prem world, the IT team acted as a centralized procurement resource. With cloud, anybody can access and consume cloud resources at will. So, it’s easy for a business to run up a cloud bill quickly and without oversight, and many enterprises have hundreds of public cloud accounts, making this visibility very challenging.

To avoid cloud sticker shock and manage cloud costs, organizations could consider three strategies:

  1. Tag cloud resources:Tags are the equivalent of labels that enable cloud instances and workloads to be organized at a user level, account level and cloud resource level. Organizations can govern and allocate spend using tags and realize cost savings in the process.
  2. Tracking unused and underutilized resources:Many organizations spin up cloud instances but forget to shut down the instances after usage. Using tags to track unused cloud instances and shutting them down could help with cost savings.
  3. Reserved instances:To prevent cloud sticker shock, organizations should consider committing to reserved instances, or RIs, for most of their cloud consumption. RIs allow cloud resources to be bought upfront, are sometimes 40% of the cost of spot pricing and can save significant cost.

Address Security And Compliance

That brings us to the topic of security and compliance. It would be impossible to underestimate the importance of this aspect of cloud migration.

For most organizations, cloud initiatives start with test workloads. To gain maximum benefit from the cloud, businesses must also migrate their development and production workloads.

Businesses need to ensure proper security and compliance to give everyone the confidence to do that. That entails creating cloud security controls that are consistent with existing company security and compliance policies and support standards like PCI, FedRAMP and GDPR.

So, you can look at security and compliance investments as an enabler of cloud cost savings. Such investments create trust. When people have that trust, they’re willing to move more applications and workloads to the cloud and enabling security best practices like encryption, cloaking, and micro-segmentation to secure these workloads.

Cloud centers of excellence can allow organizations to work through all of these areas. Such centers can help organizations align their cloud and on-premises efforts, optimize their cloud migrations and gain greater visibility. And they can assist in understanding and setting guidelines and policy for automation, compliance, performance, reliability, security and talent, and drive real cost savings from the cloud.