4 Ways to Fix Your Cloud Bill Shock

Cloud computing offers unrivaled benefits to business users, especially when it comes to scaling operations. Companies don’t have to worry about setting up and maintaining physical servers. If they need to upscale, they can have what they want at the click of a button. However, with great power comes great responsibility. Any organisation that starts using a public cloud service without putting governance and management in place puts themselves at risk of mounting costs. If you hire Azure Consultants they will be able to help ensure that your Azure Applications are built in a Cloud-Native way, .NET Development is a good language for building cloud-native applications and .NET developers can help with this.

What is Bill Shock?

You might think every business keeps track of all spending and fully understands the cost-implications of adopting cloud technologies. However, with services like Microsoft Azure, it’s not uncommon for customers to use more compute resources than they’ve planned for. It’s not always the business being over-eager with the technology at its fingertips either. Sometimes, technology partners throw in extra resources for training, research and development. 

Generally, bill shock happens for two key reasons:

  • Services are turned on and left running when they aren’t required
  • Services are scaled up without a full understanding of cost implications

Bill shock happens when businesses invest money in cloud services, but don’t accurately forecast ongoing costs and usage. Most services are billed monthly, so by the time the problem is highlighted, costs can reach a significant amount. In fact, Gartner has predicted that by 2020, 80% of organisations will overshoot their cloud infrastructure as a service (IaaS) budgets. 

The cloud promises lower costs than the capital investments of on-premises data centres, but it requires effective management to deliver on those promises. 

How to Fix Your Bill Shock

Fortunately, increased cloud costs don’t have to be a permanent fixture. The beauty of the cloud is that it’s scalable and agile; the trick is in managing cloud costs, so they don’t get out of control. In the same way that applications and services running in the cloud need to be optimised, so do costs. 

Here are four ways you can fix your cloud bill shock and keep your budget within its means:

1. Manage Cloud Costs

As the cloud offers a tempting alternative to the costs of hardware, it can be easy for companies to unknowingly buy more infrastructure than they need. This happens as IT teams fail to shut down unused environments. 

Another way that costs can mount up is by shadow IT. It’s not uncommon for employees to use or even purchase software without it being authorised. When products such as these aren’t accounted for, they can result in surprise costs. 

Cost management should be a primary focus for businesses who operate in the cloud, including automated spend tracking. If an expensive object is turned on, management tools will send out alerts. With cost tracking, daily costs are noted and compared with averages to highlight problems before the dreaded end-of-month bill hits. And, with spend tracking come optimisation. Third-party management tools can help get rid of unused resources and can automate controls to turn services on and off. 

2. Discover App Performance Issues

While bill shock may seem only to be negative, it can actually help pinpoint some problems. What’s more, as bills are sent monthly, problems can be quickly rectified. Ultimately, apps that don’t perform well will cost more to run in the cloud. The problem becomes apparent immediately, whereas over-provisioned on-premises hardware can hide a multitude of sins. 

Examples of performance issues that can be discovered based on cloud bills include:

  • The network – when bills show high costs for virtual machines (VMs) but the bandwidth costs remain constant, there is a chance the app uses more memory without supporting new users. This is an inefficient consumption of resources.
  • Storage – when bills show storage costs increasing while user numbers remain constant, applications aren’t performing. Data rotations are needed to ensure that apps don’t use more storage than required. 

3. Reduce Cloud Scaling Costs

While scalability is one of the major benefits of migrating to the cloud, it’s also one of the principal ways that costs can escalate. As many companies adopt hybrid cloud models, scaling can create many data crossings. It’s vital to review a cloud provider’s pricing model to know how egress and ingress traffic will be charged. 

Often companies will only use a test server, for example, during normal office hours. However, if it’s left running 24/7, costs can increase by as much as 70%. Likewise, applications in certain locations may have minimal load overnight. Keeping a big database running to power an app regardless of the time of day or usage needs forces costs up. However, if database power is scaled down during times of low usage, there can be substantial cost savings. 

The minimise cloud scaling costs, the key is monitoring. Having the right tools in place allows companies to detect when there is a decrease in usage. Moreover, once a reduction in usage is detected, resources can be automatically turned off to avoid unnecessary overspend. It’s vital that an app can both scale up to meet demand and drop back down when demand decreases. 

4. Build Governance Around Cloud Usage

It’s easy to get excited about the cloud and the many advantages it can offer. Building the right culture for change as part of a cloud adoption strategy is vital. However, it’s worth bearing in mind that users can be very eager to test the new tools at their disposal.

It’s critical to build the correct governance and management around cloud usage. Policies should be in place to dictate who can spin up new services and incur additional costs to the company. Anyone who is authorised to action new services should, in turn, be made fully aware of the significance of any decisions they make. 

While cloud bill shock can happen, it can easily be avoided. With the right monitoring and management, cloud costs should be able to be optimised. What’s more, by monitoring spend, it’s possible to pinpoint performance issues, make changes and get even more value from the cloud. 

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About the author

Michael Ridland is the Co-CEO and Founder of Xam Consulting.

Design-led problem solving delivering digital solutions.

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