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How to Leverage the Power of the Cloud for Spend Management

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“Cloud” is no longer just a hot-button term. It’s a means of networking through technology that continues to evolve. The trends in cloud spend are incredible. Almost every organization uses it in one way or another—and the pace isn’t slowing. In fact, 83% of enterprise workloads are predicted to be in the cloud by the year 2020.

Despite the concept of a cloud-first environment (which automates processes in real-time), many companies are still hesitant to maximize their cloud footprint. In order to invest, you have to be confident in the technology. Here are some ways to leverage the power of cloud spend management and make it worth your while.

What is “The Cloud”

Popular programs that are required to run certain applications are now located on a remote machine that is owned by a third-party. Since your business computer can have processing limits, the cloud keeps you from losing performance on daily operations. It also helps to save money on IT support, yet remain competitive in the market.

The “cloud” is basically the third-party computers that run applications, use a server system, and store data.

Types of Cloud Services

Cloud computing entails a set of channels that enable a business to perform a multitude of tasks online.

Based on a deployment model, we can classify cloud as:

  • Public
  • Private
  • Hybrid
  • Community cloud

Public Cloud

A public cloud means the entire computing infrastructure is located on the premises of a cloud computing organization that offers a cloud service. Thus, the location is separate from the customer and has no physical control over the infrastructure. 

It also uses shared resources. This makes for optimal performance but also leaves the system vulnerable to various attacks and security breaches. 

Private Cloud

Providing the same benefits as the public cloud, the private cloud uses dedicated and private hardware. This means using a cloud infrastructure (network) solely by one organization or customer. It is never shared with others for a variety of reasons—yet is remotely located. 

Brands have the option of choosing an on-premise private cloud (which is more expensive). This means they also have physical control over the infrastructure. 

If you seek a high level of security, a private network is the best bet. However, cost reduction can be minimal if a business needs to invest in an on-premise cloud infrastructure. 

The private cloud includes advantages like:

  • Less provisioning time for new servers
  • Increased redundancy
  • Use of dedicated and private hardware
  • Compared to hosting physical servers, it has quicker expendability
  • Saved capital by eliminating hardware support contracts

Hybrid Cloud

A hybrid cloud is a combination of both public and private cloud services. The function depends on the purpose. The public cloud can be used to support customers while keeping data secured through the private cloud. 

Many companies associate a traditional public cloud service with complete scalability and the ability to handle consistent shifts in demand. Despite this, issues can arise when certain workloads are data-intensive.

Community Cloud

This is a cloud infrastructure with a shared data center between organizations. It typically involves a shared management solution. For example, a community cloud can belong to a single country or government of sorts. They can also be located both on or off the premises.

Cloud Platforms

The “cloudability” of a platform is based on the service model. Cloud management software can include:

Cloud migration can include additional platforms like storage, process, application, management, and others like:

  • Information
  • Database 
  • Testing-as-a-service 

What is Cloud Spend Management?

Prior to your digital transformation, it’s important to practice effective cloud spend management. This allows for the insight and visibility needed to optimize current cloud resources and cloud spend, control budgets, and predict future cloud usage. It enables a business to avoid the pitfalls of overspending in the cloud and regain control of the cloud-based environment.

Cloud spend management entails a few tenets including:

Cloud Cost Management

This allows a business to bring teams together and fuel innovations. It’s about more than just reducing costs.

Cloud Cost Optimization

Don’t waste money paying for more resources than necessary. Optimize cloud costs to free up more capital.

Cloud Cost Visibility

This allows a business to gain an accurate view of cloud spend, no matter how complex the infrastructure. It’s all about smart expense management.

The Benefits of Cloud Cost Management

Delving into any new technology can be daunting, especially for a small business. When it comes to effective cloud spend management, there are a lot of advantages one can reap. These include:

Increased Transparency and Visibility

Gain deeper insights into spend and cloud usage across a multi-cloud environment. Your business will be able to identify wasted and underutilized resources, as well as recognize cost-saving opportunities.

Optimize Cloud Spending

Take a consumption-based approach to rein in unpredictable cloud budgets. You can track current cloud resource usage, optimize cloud budgets, and predict future usage.

Long-Term Strategy

Create a long-term plan to consistently monitor cloud resources. Cloud spend management allows a business to track cloud usage to make more informed decisions and maximize benefits across your entire organization. 

Gain More Control

Get a clear view of how a business uses cloud resources across different business units. This allows for centralized tagging across providers to better govern cloud resources.

Actionable Data

Cloud spend management means you better understand business demands. It creates actionable data that enables a business to:

  • Improve compliance
  • Provide better security
  • Identify cost savings
  • Right-size your cloud investment

The Future of Cloud Management Platforms

The entire value prop of the cloud boils down to agility. However, there is also the cost to consider. Sometimes quantifying that cost is nuanced. A cloud provider bill will have plenty of operational detail and an AP-oriented view of your cloud liability. 

However, there is still a lack of context. Who is driving the spend? What are the full branded costs for the cloud? Does the spend support any business initiatives?

Today, other tools may seem to take up a higher priority and a larger portion of IT’s budget than the cloud. From purely a spending point of view, the cloud may seem like a second-class citizen. However, the balance seems to be slowly shifting. Cloud adoption is increasing year after year. This means cloud spend today, will mushroom in the future.

All new technology is now driven by the cloud. Getting cloud cost management in order now will spell out future success. There are many arguments against the cloud but if you consider cloud spend and value, nothing should stand in the way.

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