Once You’re in the Cloud, Managing Cloud Costs Can Be a Challenge, Report Says

A couple of years ago, organizations raced to catch up and understand cloud computing and formulate strategies for adopting cloud services. Now, according to a new report, the problem isn’t so much cloud adoption, it’s managing the cloud.

Organizations that made the switch are finding new problems they didn’t foresee, leading to cloud cost overruns and exposing disconnects between levels of management.

According to “The State of Cloud Readiness 2018,” a new report put out by managed services provider Softchoice, while cloud adoption has risen since 2016, organizations aren’t seeing the results they’d envisioned. Softchoice surveyed 250 IT “decision makers,” from managers to C-suite executives, all in organizations of more than 250 people. The report paints this picture:

Many organizations confront unforeseen challenges in the cloud, including runaway costs and lack of expertise. Given their extensive preparation, IT leaders are befuddled by their cloud troubles. By resetting the foundations of their strategies and bringing in the right expertise, leaders can find solutions to their cloud hardships.

The survey found 43% of IT leaders have trouble knowing how to create an effective cloud management strategy, and 57% have exceeded their cloud budget at some point. On top of that, one-third of those who exceeded their budget did so by more than 20%.

The report also shows a disconnect between IT leaders in managerial positions and executives in the C-suite.

According to the survey, 41% of managers strongly agree that moving to the cloud has helped advance their organizations toward their goals, compared to 61% of executives.

And executives are far clearer on who is responsible for each workload cost and on how security policies extend to the cloud, whereas managers are less confident. Only 36% strongly agree they are confident in how their security policies extend to the cloud.

Zylo CEO Eric Christopher, who wasn’t part of the study, wrote on this site last year about the need to work with procurement as well as be vigilant in monitoring and evaluating cloud services:

Because of the staggering growth of the cloud and the rapid adoption of new tech within the enterprise ecosystem, traditional IT procurement often lacks visibility into the software that those across the organization are actually subscribing to and using. This has become largely due to decentralized purchasing where decisions are made outside of the procurement function at the departmental or even individual level.

As the Softchoice report states, much of this comes down to a governance issue.

The questions of who owns cloud applications or workloads, and how billing will be managed, are often left out of cloud migration strategies, the report states.

According to the report’s authors, codefying ownership and billing is the “foundation for effective cost management,” and it starts with implementing the right tools to track usage.