“Lift and shift” may be the fastest way to migrate IT services and workloads to the cloud without any modifications to applications however today, greater cloud IT services and application performance and cost optimization are hard-and-fast enterprise requirements.
Migrating mission critical applications to Oracle Cloud like E-Business Suite, JD Edwards, peoplesoft, will require a certain amount of expertise from trained and certified resources or partner MSP/MSE to get first time right and accelerated migration.
Getting the most out of public clouds for the least amount of money is the essence of cloud cost optimization. We have observed that the pandemic panic caused enterprise IT to act reactively not proactively. This leads to cost considerations and planning being tossed out the window.
Issues IT Decision Makers Face in Spiraling Cloud Costs
- Not planning in advance for cloud use, which would gain the use of reserved instances at a much-discounted price, as well as other benefits. While many enterprises are responding rapidly to the changing needs of IT due to the pandemic, others are still not cost planning, which could significantly optimize their cloud spending.
- Lacking cloud cost governance systems. These tools not only monitor existing usage costs which are tracked down to the applications, databases, and users, but assist in demand planning as well. They are invaluable.
- Tossing money at the problems. In short, we’re forced into stress testing cloud-based systems perhaps prematurely. Pushing applications quickly into production means that the number of issues needing fixes ramps up 500 percent in the short term. Enterprises are forced to hire some very pricey people to fix the issues, using whack-a-mole tactics which are hugely expensive
How to Make an Impact for Cost Optimization?
To make an impact in cost optimization for Cloud, one will need to look at 3 focus areas areas:
- Demand Management
- Provider Management
- Financial Management
These are elaborated further below:
1. Manage Business Demand for Cloud Service – Challenges and Resolutions
CIOs and their teams are traditionally seen as responsible for managing the IT budget, although some organizations have moved to a shared or more distributed budget model.
|A higher on-demand or spot price is often charged for short-term capacity, whereas longer term requirements offer a lower price in return for a reservation or longer-term commitment.||Planning and reserving predictable capacity, but buying unpredictable demand more flexibly, IT organizations can reduce their cost commitments. Use tools to compare options in often complex pricing models.|
|Cloud infrastructure requirements are underused because they were overspecified.||Scalable cloud services have since made overprovisioning unnecessary, but old behaviors continue. Gartner found that organizations overspent by up to 70% for reasons including a lack of oversight|
|Access requests to PaaS / SaaS licence aren’t always motivated by genuine business needs, but are instead motivated by a fear of losing status or missing out. Once granted, access is rarely, if ever, reviewed in most companies.||Review the usage and access to licences provided to users on a periodic basis. This review can help save cost substantially by removing unutilized or sharing access. De-risk your cloud journey.|
|Lack of right skills trying to resolve challenges in a new cloud environment, either complicating the issue or delaying the resolution.||Engage a certified cloud MSP or a MSE that Oracle calls its certified partners, to advise, build, migrate, and manage any simple to complex cloud environments on OCI.|
2. Manage Providers and Drive Better Value – Challenges and Resolutions
Some financially challenged IT organizations move to the cloud because they hope it will lower their costs, only to discover costs they hadn’t planned for. It’s unreasonable to expect online cost comparison calculators to consider every possible eventuality.
|Lack of cost planning and oversight, as organizations continue to control provisioning when they migrate to the cloud, leading to increasing costs.||Right size and provision for scalability and rely on automation, while keeping monitoring and alerts in strict check|
|Budget holders often fear being unable to manage their suppliers. They’re afraid of being locked into a cloud service where the provider keeps increasing the fees||It can cost far less to start using another public cloud provider than to build a perpetually licensed solution on-premises|
|In case you do not archive or purge your data, you may be paying for excess for data storage.||Regularly archive and or Purge unused data from cloud provider can avoid storage surcharges|
|Customizing infrastructure to bare metal solution. This may lead to increase in costs.||Buying a ready-made cloud solution can lower risk when compared with custom solution development. E.g With Oracle OCI Oracle AU apps can easily migrate to OCI. You may not get the same economics when you move to AWS or Azure.|
3. Ensure Cloud Savings are Recognized in all Budgets
Cloud adoption can achieve significant cost savings that go far beyond enterprises’ IT budgets. The cloud can also bring costs into the IT budget that were previously recognized elsewhere. Some organizations overestimate cost savings from staff reduction because they overlook the need to manage both the supply and demand for cloud services. However, even after moving to the cloud significant savings can still be recognized by simply putting the records straight.
E.g Data center occupancy, If accounted for in the budget under heads like, buildings and facilities, it will never be able to give a correct picture to justify the Cloud cost savings. Account all possible budgets be it HR, Operations, Infra, etc to ensure your cost savings are truly accounted for.
If account control is dispersed across a company, cloud spend may be recorded in cost centers unrelated to IT. It can take time to uncover all spend points and implement a cooperative governance model. Without coordination, these dispersed and often underutilized environments can easily rack up excessive monthly charges.
Type of Cloud Costs
- Untraceable Costs: These are costs found in the vendor reports from finance that an account owner or you are unable to trace to a business activity, as well as costs that are too small to bother tagging.
- Optimizable Costs: These are traceable costs that can be tagged to a legitimate business activity, are ongoing and are large enough to be relevant.
- Protected Costs: These are costs that account owners wish to control themselves, in their own way. In this last category, there are frequently costs where a team has a pending plan for cost control that has yet to be fully implemented.
Cloud doesn’t guarantee savings. CIOs must raise their teams’ game and tactics in all these areas to optimize and make real savings in the cloud, especially demand management, provider management and financial accounting.
IT Convergence has been designated as only one of the few certified Oracle cloud MSE in North America, which can assess, advise, build, migrate, optimize and manage your Oracle Cloud Infrastructure, all under a single contract.
Speak to our experts who can help you streamline your journey and help optimize your cost to help you realise true cloud cost savings.
Here is the summary of the guide above on what you should be looking out to do:
1. Design and adhere to a tagging plan for “cloud accounted”
2. Rightsize resources
3. Choose an appropriate pricing model
4. Engage a professional Cloud certified MSP/MSE
5. Scrutinize and limit data egress
6. Reclaim orphaned resources
7. Throttle poorly utilized resources
8. Use the free tools