How to Solve the Great Cloud Cost Dilemma: Understanding Your Options for Cost Control

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Modern businesses need a dynamic and flexible approach to cloud computing in order to realise the benefits of this evolving technology fully.

As hybrid cloud deployments expand, so have costs. Enterprises can see the benefits that cloud services will continue to offer, but a new approach is needed to ensure costs remain under control and deliver tangible ROI.

As spending on cloud services has expanded, so has the complexity of these infrastructures. Unfortunately, complexity can also bring with it cost. As a result, many businesses are now considering their entire cloud deployment to rationalise these services.

Moreover, technologies including 5G, IoT, Edge Computing, and AI are beginning to profoundly impact business processes and customer-facing services. As all these technologies have a cloud component, cost becomes an even more important aspect to control.

"IT infrastructure complexity can be taken away by using modern hyper-converged infrastructures,” comments Bart Mellenbergh, EMEA director, Customer-Centric Cloud and Containers, at Dell Technologies.

He adds that cloud service providers are now offering fully managed on-premises infrastructures taking away that complexity.

Twin drivers

Reducing costs and improving efficiency are twin drivers behind a shift in enterprise focus. They are a core component of digital transformation roadmaps.

Meanwhile, a move from capital expenditure (CAPEX) to operational expenditure (OPEX) is a clear trend that will only accelerate.

And as businesses enter the 'data decade,' having underlying IT infrastructures that ensure enterprises can use insightful and actionable analytics to grow will be crucial.

A hybrid multi-cloud approach has proven to be the optimum strategy to deliver reliable, secure, cost-effective services. The next phase of development is to accelerate the adoption of Cloud Consumption as a Service (CCaaS) as a new model to fully support data-based business processes.

The cost-effective cloud

That statistic speaks volumes about how enterprises are ratifying their cloud infrastructure to prepare their businesses to become dynamic, agile enterprises that can meet all the demands of their customers.

As businesses plan ahead, how important will it be to understand and control the cost of cloud services?

Mellenbergh believes a hybrid approach will become mainstream.

“If anything, the pandemic period has shown companies that the cost of using a public cloud needs to be carefully monitored, controlled, and properly predicted,” he says.

“That challenge has not gone away.”

He says what’s needed is hybrid cloud platforms that can offer insight and choice into where, when, how, and what technologies and platforms are appropriated.

Mellenbergh says it is also important that Cloud Consumption as a Service (CCaaS) is optimised not just for cost but around performance, protection, security, compliance, and many other factors.

Rory Choudhuri, Solutions Marketing Director, VMware, EMEA, believes using data to focus on cloud deployments can deliver tangible economic benefits.

He says: “Businesses can integrate the CCaaS approach into their strategic data management planning by understanding their cost upfront and continuing to measure it.

“By measuring it, they will determine the rate of change in their services and will more actively be able to predict their cost and thereby have better budgets. Moreover, they'll be able to optimise their environments to save money and utilise it for additional services."

Dynamic consumption

The move to subscription models has continued to accelerate as enterprises look to rationalise their costs. It has become commonplace for businesses to build the systems they need with IaaS (Infrastructure as a Service), PaaS (Platforms as a Service) joining general SaaS tools deployed across the company’s hybrid cloud environment.

The shift toward anything-as-a-service (XaaS) will simplify IT deployment models as enterprises focus on OPEX from CAPEX, thus creating a new era in cost-effective cloud services which could see an average cost reduction of 39% or $1.5m per year.

Mellenbergh explains how XaaS is a new approach set to revolutionise how cloud services are deployed to become an adequate infrastructure that consistently delivers high levels of ROI.

“Industry is telling us that we are entering the ‘data decade’ and that capability to create services close to where the data is originated needs to be an essential part of any company’s strategy.”

Mellenbergh expects public cloud consumption to grow over the next couple of years, but says the industry will drift towards an optimal use of hybrid and multi-cloud usage.

Mellenbergh concludes: “Today CCaaS is often used as an afterthought and in some cases not well thought through, with (sometimes perceived) lower cost as the main driver. Using CCaaS, and then, especially as part of a hybrid cloud strategy, can provide a lot more function and strategic advantage to a company but it should be considered in that context.”

Only the most agile enterprises that leverage the IT infrastructure and assets as an integrated whole will lead their industries or market sectors. However, disparate pricing models have also appeared as cloud services have proliferated.

VMware’s Rory Choudhuri advises that a clear sight of cloud costs will ultimately deliver the cost-saving enterprises are looking to achieve.

He says: “Businesses can integrate the CCaaS approach into their strategic data management planning by understanding their cost upfront and continuing to measure it. By measuring it, they will determine the rate of change in their services and will more actively be able to predict their cost and thereby have better budgets. Moreover, they'll be able to optimise their environments to save money and utilise it for additional services.”

These pricing models can often be manifold and confusing. Embracing the CCaaS approach enables businesses to take back control of their cloud infrastructures and once again make them a cost-effective integrated component of their strategic planning.

Find out more about Dell and VMware’s integrated platforms and solutions.