The Emergence of Cloud Cost Management

Cloud services do have their advantages, costs have reached higher levels than ever before.
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There is no denying it.

Cloud is all the rage.

Nothing suggests this trend will stop anytime soon and while Cloud services do have their advantages, costs have reached higher levels than ever before.

In a Cloud Survey by Syncsort it was found that 70% of over 900 IT professionals use cloud services.

The same report also highlights that 42% said migrations to cloud were typically conducted on an ad hoc basis.

This strategy has proved expensive and organizations are struggling to contain cloud costs, especially those using it beyond initial adoption.

50% those surveyed said that cloud costs were higher than expected with over half of those asked, citing migration and management as the biggest cost challenges.

A Datalink survey found that 40% of organizations with public cloud are now moving back on premises with a majority citing cost/pricing concerns for this move.

Who’s job is it?

Assuming staff and Vendor Managers, responsible for license agreements, will be able to keep cloud spend low is wrong.

That is not because your staff isn’t amazing but because doing cloud right is extremely difficult and complex beyond human capabilities.

Cloud prices and service changes are dynamic, which means it takes a deep level of understanding in order to optimize the way you run cloud.

Gartner describes the Cloud Cost Manager as an emerging role.

We at KOSTNER believe Cloud Cost Management should be a service.

Here are the 7 essential tenants of KOSTNER’s approach to Cloud Cost Management:

Understand cloud cost management:

1. Understand Your Costs

2. Understand Your Consumption Patterns

3. Understand Major Changes and Trends

The first step is to understand your costs when moving to cloud.

This includes who in your organization spends on cloud, whether it’s through subscriptions, product groups or something else.

The next step is to understand what the money is being spent on. Consumption is non-obvious and could be on anything from websites, servers, AI, storage and so on. There are few valid rules-of-thumb.

On top of this, staying updated on all major changes and trends to cloud is essential if you want to avoid unexpected jumps in costs.

Optimize cloud cost management:

4. Ideal Consumption Model

5. Ideal Licensing

6. Geography

7. Correct Choice of Service Type

Optimizing cloud is very complex and requires a deep understanding of the various possibilities available but is crucial when it comes to running cloud to best fit needs while keeping costs low.

Choosing an ideal consumption model like reserve instances for example can help run cloud more optimally.

The consumption model you choose should be based on the needs you have for it and the experience of how people run it.

Next, choose a licensing that fits your needs, be it mobility, azure hybrid benefits, red hat cloud connect or something else.

Geography can also play a big role in cutting costs.

If the placement of your servers is not a priority, the costs can vary 35% from the cheapest to the most expensive region.

This could be development workloads or other workloads not impacted by higher latency and legal requirements for data placement.

Finally, it is important to understand that the type of service you choose makes a difference for your overall spend and flexibility.

Some services come with unlimited traffic or operations, others charge for these.

Knowing when to use what is key.

Too much data and complexity for humans.

AI is our answer.

The dynamic nature of cloud costs and services makes applying these steps complex.

Instead of making a one-time decision on the many choices involved with using cloud, organizations have to stay up to date consistently to manage costs and keep it running optimally.

KOSTNER uses AI to do exactly that.

Final thoughts

KOSTNER’s Cloud Cost Management service analyzes the millions of possibilities available with AI to find the best possible way to run cloud based on your specific needs while keeping costs down.

It is time consuming and difficult to keep up with services, price models, consumption offerings, and licencing options, and sheer scale puts it beyond human capability to apply these rules to even a medium-sized environment.

This makes KOSTNER’s AI a valuable tool for anyone tasked with cloud cost management.

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We look forward to helping you optimize your cloud future.

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