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Cloud Cost Management Strategies

There’s no doubt that CIOs will face cost containment strategies this year related to their embrace of the cloud. Just moving to the cloud isn’t enough; CIOs must make smart decisions about getting the most value for the best price. What cost management strategies should IT teams incorporate this year?

Business Strategy Requires Better Cloud Management

We’re a decade into cloud normalization for business leadership, and most of them are probably wondering why the cost savings they anticipated haven’t materialized. Forrester predicted 2020 as the year business leaders would take a good look around at their cloud investment and reshape their business strategy to embrace cost-cutting.

Gartner reports fully 81% of enterprise and mid-level c-suite say they use two or more public cloud providers. This has given rise to increasing complexities in cloud spending, to the tune of around $32 billion annually worldwide. But all that spending doesn’t necessarily mean it’s wise spending. says companies will waste more than $14 billion on the cloud this year. Deloitte business leadership was just quoted in CIO saying that companies have no guarantee cloud services will save you a dime. The point is that most companies have failed in their business strategy for cost containment of the public cloud.

This leaves CIOs in an embarrassingly untenable position. How can they create and implement public cloud cost containment strategies?

Five Cloud Cost Strategies for Business Leadership

Despite its scalability, the cloud is a finite resource. Cloud services must be watched closely in the same way a retail chain watches electricity and heating consumption in their storefronts.

Business leadership can create manageable options for cloud resource management. Here are five tips:

  1. Plan and analyze with cost/benefit analyses upfront. The cloud can save you money, but only if you plan, implement, and monitor it effectively. Creating a cost savings roadmap at the beginning of cloud adoption, and then striving to hit the road markers with smart management will optimize your cloud spend. Truthfully, it’s not unlike the capital overhead spending plans CIOs used to manage for their on-premise equipment.
  2. Optimize and right-size your cloud configurations. It’s easy to overprovision as old, and new resources evolve. But the cloud responds quickly to the ebb and flow of demand. Hence, the odds are in your favor that careful monitoring, decommissioning, and watching the spin up new instances will help you maximize the investment.
  3. Talk about cloud cost-cutting with your IT teams and department heads. Business leaders should recognize the impact of cloud spend and watch it closely alongside department budgets to reduce waste. Cost optimization should be everyone’s responsibility.
  4. Get organized around your cloud spend. When was the last time your team audited your cloud services? Try to silo cloud consumption into specific business units, then review subscriptions individually as well as on the whole. This should be done regularly, not annually.
  5. Embrace pay-as-you-go models along with regular auditing to maximize cloud spend. Look to maximize available pricing options whenever possible to cut costs from continuously running applications. Look for managed services and prepackaged tools to improve spend.

Business leadership must recognize that cloud cost-cutting is not a side job or even a quarterly event. The momentous task of cost-cutting your cloud spend must be deliberately ongoing, full-time, and a part of your business strategy this year.