Companies wasting money on Cloud services

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Companies wasting money on Cloud services

Businesses are moving their applications and storage to the cloud rapidly. With all of that movement to the cloud, many businesses are ‘buying’ more than they need, as they are still learning about consumption requirements. When there really are no limitations on the resources you are allowed to use, you can end up with more than necessary.

One of the enterprise cloud management company has seen companies waste on average 35 percent of their cloud spend. This equates to $6 billion in annualized wasted cost for AWS alone, and additional $4 billion on Microsoft Azure and Google Cloud Platform.

Some of the key areas of cloud spend waste from the findings are:

  1. Instance Sizing: Forty percent of instances are sized larger than is required for the workload and could be better-sized without impacting the performance of the application. Each oversized instance is wasting 50-75 percent, resulting in 11-16 percent of all cloud spend being wasted.
  2. Schedule VMs: Many virtual machines in the public cloud are left running 24×7 rather than being turned off during times that they are not in use. For example, shutting down development instances that are not used at night and on weekends saves 67 percent.
  3. Choose the correct regions: Thirteen percent of all cloud instances are running in more expensive regions, even though the cloud provider offers a less expensive location nearby.
  4. Utilize discounts:Companies find it difficult to choose the best discount options and forego savings that can average around 30 percent. AWS has multiple discounting price points for reserved instances, while Azure has recently announced a new reserved instance offering.
  5. Delete unused storage: Cloud users neglect to delete storage that is no longer used. Virtual machines are shut down, but the storage that was attached is often left running.

AWS recently claimed it saved AWS users $500 million by alerting customers when they were overpaying, from just one aspect. Cloud providers could build analysis tools to give customers a better idea of where they are wasting money.

However, the responsibility is on the customers to perform regular checks and analysis of their cloud spending. Companies need to have a clear understanding and know exactly what is necessary and what could be eliminated. Create a checklist outlining these areas of waste and audit every 6 months to make sure your company is not wasting money.

abdul hafiz

Author: Abdul Hafiz

Enterprise Solution Architect



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