A UK-based telco migrated to the cloud to take advantage of cost efficiencies and scalability through cloud adoption. But contrary to expectations, the costs kept mounting over time and strained the telcos operating budgets.
This is a scenario playing out in organizations across industries as CTOs and CIOs attracted by the pay-as-you-use model migrate their data, applications and workloads to the cloud. At the same time, a complex pricing matrix and hidden costs have made cloud cost management a top priority for business transformation initiatives.
With this backdrop, CXOs are now engaging cloud-managed service providers to focus on cloud monitoring solutions such as cloud performance monitoring, app management services, risk assessment and service monitoring. Using a similar approach, the UK-based telco was able to bring down 50% of its annual cloud services bill, amounting to approximately 100,000 pounds. This was primarily achieved by migrating its cloud providers built-in monitoring tools to open-source alternatives.
The demand for cost-effective cloud monitoring is set to grow as CTOs and CIOs look for better returns on their cloud investments. The analyst firm, Gartner, estimates the global end-user spending on public cloud services to grow 20.7% amounting to US$ 591.8 billion in 2023 (up from US$ 490.3 billion in 2o22). By 2024, it is estimated that 45% of IT spending will shift from internal infrastructure to cloud services.
Why the Cloud?
Moving to the cloud has become synonymous with business growth and agility. When done well, organizations stand to save costs while maintaining the flexibility to scale. Over the past two decades, migration to the cloud has grown steadily for several reasons:
- Enterprises with older data centers do not want to rebuild their existing infrastructure or invest in new infrastructure associated with high capital costs.
- The pandemic was a trigger for numerous organizations to move from data centers and adopt cloud services. With this shift, organizations were now able to leverage the scalability required for remote work and released capital costs trapped in data centers.
- Many organizations are rethinking the application hosting strategy based on network latency, customer population clusters and geopolitical limitations.
As the demand for scalability, availability, layered security, hedging lock-in and ease of delivery rises, the next few years will see organizations take a strategic approach to cloud services.
Tackling the Cost Conundrum
While cloud adoption initiatives are commonly associated with reducing capital costs and providing uptime, CIOs are becoming painfully aware of the hidden costs that can upset their operating budgets.
Here are some common measures for organizations to optimize costs:
- Turn off all non-production Virtual Machines (VM). If only 70% of the VMs are needed to operate, cost optimization can potentially be achieved for the remaining 30%.
- Eliminate duplication: If two teams operating with similar data are using different cloud storage resources, bring them together to optimize storage costs.
- Pause testing environment when not needed: If testing is conducted only for half a month, shut down the systems during idle time to optimize costs.
A CIO’s hyperscaler commitments have become strategic bets and there is no looking back. Here is what a CIO/CTO can do to support the business sustainably:
Use cloud management tools to visualize and right-size investments:
While there are many tools available for cloud cost optimization, it helps to consider the big picture and a vendor-neutral stance with a third-party solution. Leverage the expertise of a cloud-managed services provider to choose the right Cloud Cost Management and Optimization (CCMO) tools specific to your requirements.
Develop the discipline of cloud financial management
Behind every painful story is a critical error in applying cost governance. Embrace Financial Operations (FinOps) practices to professionalize these efforts. This will lead to financial accountability, streamline cross-group communication on costs, optimize the hybrid cloud network and help transform organizational culture.
Plan for the future
Align cloud consumption with organizational sustainability goals. Check that your cloud provider articulates a sustainability roadmap which aligns with your organization’s green goals. Elevate hyperscalers to premium business partners where both parties commit to business outcomes and ensure that compensation is linked to achieving these.
How Torry Harris Can Help
THIS provides clients with a glide path for Leaner Production Support (LeanOps) by implementing SRE processes, unified monitoring solutions, DevSecOps tools using CI/CD/CT tooling and process automation using RPA and other tools.
More importantly, we acknowledge that cost is an important consideration for our clients in these challenging times. Through our cloud monitoring solutions and FinOps capabilities, we work with our clients to realize cost impact in the cloud. As part of our delivery, we also offer annual optimization of our service costs through intelligent frameworks and bundled solution accelerators.
Our team of certified cloud monitoring specialists, cloud operations engineers, risk and compliance specialists and security experts collaborate with our clients to deliver impactful outcomes.
See how we helped accelerate British Telecom’s service delivery by 40% through a cloud-based platform ensuring service stability, efficient resource utilization and reduced rework.