More than a decade after the cloud became a stable figurehead in the IT universe, enterprise organizations finally embraced the model. Today, most large-scale organizations have adopted hybrid and multi-cloud models to modernize their remaining on-premise architectures. While businesses are attracted to the scalability and agility of the cloud, managing these new models has become time consuming and problematic for most technology teams.

The problematic multi-cloud

Information Technology teams often struggle with fiscal management of their multi-cloud environments. A recent study showed 22% of enterprise organizations have moved some services back on-premise to control costs. There is no doubt that the public cloud can provide incredible scalability, low operational overhead, and solid performance when compared to prior legacy models. But cloud and hybrid cloud models must be managed effectively to avoid cost overruns and unexpected fees. For example, some of the typical cost variances creating budgetary surprises in multi-cloud environments include:

• Capacity planning didn’t extend to usage spikes and variances.
• Over purchase of cloud storage occurred when the cloud usage was lower than planned.
• Extended DevOps or testing needs beyond initial deployment were not anticipated.
• Hidden or smaller costs associated with data transfer or load balancing weren’t calculated.
• Resources were never decommissioned when the organization stopped using them.
• Higher cost services were used more frequently than anticipated.

Hewlett Packard Enterprise (HPE) says two key variables tend to drive up hybrid IT spend: Labor efficiency and resource utilization.

Spotting hybrid cloud cost overruns

Incomplete or inaccurate cost forecasting is the core problem for most enterprise organizations seeking to make sense of their hybrid IT spending. This next iteration of the hybrid cloud must include better cost controls.

Hybrid IT strategies should roadmap an internal process for red flagging cost overruns in labor and resource utilization as part of a continuous effort to achieve digital transformation. But it’s much easier to write down this goal than it is to achieve it. Cloud providers have their own pricing structure by product. These models were not designed to maximize the customer’s hybrid architecture; instead, they maximize the profitability of the cloud vendor. Imposing accountability across increasingly complex hybrid architectures isn’t something many technology leaders focused on — that is, until they started seeing the bottom line, sometimes years after the contracts were signed.

Maximizing value and making “cents” of hybrid IT

Solving the cost overrun problem in hybrid IT architectures starts with a more accurate picture of past, present, and forecasted expenditures. Creating a hybrid cloud strategy must include constant monitoring of resource utilization trends, transparency, and visibility into spending. Given the complexity of most enterprise organizations, many technology leaders are tasked with not only strategic digital transformation but also cost containment.

It’s this corporate mantra of “innovate — but show value,” that is increasingly difficult for IT teams to manage. This is particularly true, as IT operations have grown in complexity. IT teams should be focused on go-to-market strategies, the speed of deployments, and IT security. Instead, they’re saddled with inadvertent cost overruns and the mandate to do more, faster, and with less budget.

Enterprise organizations understand the importance of cost containment in hybrid IT models; however, establishing the controls and oversight necessary to regain that control often is time intensive. As a result, many organizations are seeking outside resources for help. Windsor Group specializes in evaluating, prioritizing, and selecting managed service solutions to advance your IT speed and agility. Contact our team to find out more.