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Use cloud cost management tools to track usage, save money

Shadow IT and poor cloud service visibility make managing cloud costs tricky for corporations, but new cloud cost management tools are developed every day.

Determining how much you're paying for cloud services seems like a simple task, but many corporations have trouble...

with it. In response, a spate of vendors, including VMware, developed cloud cost management tools that help businesses determine the cost of their services. Customer interest in these tools has been tepid, because they are expensive and often have trouble delivering the level of objectivity firms desire.

When evaluating the cost of cloud computing, many enterprises find themselves with incomplete pictures about its use and pricing for a variety of reasons.

"A lot of the initial drive to the cloud was based on the premise that it will be cheaper to run this on AWS [Amazon Web Services] than on premises," said Sophia Vargas, an analyst at Forrester Research. "However, that turned out not to be the case with many workloads, so many organizations that are now maturing and expanding their use of cloud realize that they need to get a better handle on cost drivers and figure out how to remove unnecessary spend."

Shadow IT is one factor in the fragmented picture. Department managers and sometimes individual employees buy services without the IT department's blessing. In fact, a Symantec survey found that such applications are running in more than three out of four -- 77% -- of organizations.

Monitoring the cost of cloud computing

When evaluating the cost of cloud computing, many enterprises find themselves with incomplete pictures about its use and pricing for a variety of reasons.

In addition, many businesses rely on cloud cost management tools coming from cloud suppliers themselves. These billing systems are relatively new and often unsophisticated. The bills the cloud vendors provide are often difficult to read; they resemble a consumer utility or telephone bill. Rather than being written to help the customer monitor their costs, they are designed so the vendor understands its operation.

Third parties, including ActOnMagic Technologies, Apptio, Cloud Cruiser, Cloudability, Cloudyn, Talligent and VMware, developed add-on billing offerings, so enterprises gain insight into the cost of cloud computing for each respective vendor. These products provide a unified view of private and public cloud services. One example, VMware vRealize Business for Cloud, provides cloud costing and consumption analyses and includes a data collection feature that consolidates usage information from a local or a remote data center.

Reducing costs by avoiding cloud sprawl

As they gain a better understanding of the cost of cloud computing, businesses can take steps to reduce their expenses.

"Sometimes, corporations find unneeded expenses," said Owen Rogers, research director in the digital economics unit at 451 Research. For instance, enterprises fall victim to cloud sprawl: They buy more services than they need. For example, two lines-of-business managers could purchase the same storage service.

Cloud consultant Judith Hurwitz discusses the cost of cloud computing in this podcast and why we'll stop using the term altogether.

Cloud enables firms to add new services rapidly; however, a corporation needs to make sure they turn off the resources when they are no longer needed. In areas like development, techies constantly spin up and tear down computer resources, and it is fairly common for new resources to be put up for testing, but not taken down once testing is finished.

Volume pricing is another area of potential reduction. Once they consolidate their department billing, corporations may find they qualify for various volume discounts.

Cloud services offer poor visibility

But cloud cost management tools have limitations. The visibility offered to various cloud services is uneven. The offerings often work well with the vendor's own products, but not as well with other suppliers. At first, the VMware tool worked with its own cloud platform, but now, the system offers costs and pricing information for Amazon Web Services and Microsoft's Azure.

The offerings can also be expensive. VMware vRealize Business 7 Standard is sold in 25 operating system instance (OSI) packs at $200 per OSI. Sometimes, the cost calculus does not justify the purchase of the system. Consequently, the services are not widely used.

"There is some growing interest in these products, but to date, adoption has been fairly low," said Mary Johnston Turner, research vice president for enterprise systems management software at IDC.

What is their future? System and network management tools have evolved into broad suites that not only look at physical management, but also areas such as system performance. Eventually, the costing tools may be folded into and bundled with vendors' existing management suites. For instance, VMware vRealize Business 7 Standard is available as part of the VMware vCloud Suite and VMware vRealize Suites.

Corporations have been deploying more cloud systems, but in many cases, they lacked visibility into the use of those services. As a result, new cloud cost management tools have been developed. Interest in these tools is growing, although how they should be packaged is an area that is still evolving.

Next Steps

How can businesses avoid hidden cloud computing costs?

Cloud consolidation improves security and reduces sprawl

Be mindful of hidden costs in open source cloud computing

This was last published in June 2016

Dig Deeper on Using VMware cloud computing tools

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