Public cloud spending spins out of control

Posted by Mike Vizard on May 24, 2016 11:41:58 AM

Public_cloud_spending.jpgAs is often the case in life, there can always be too much of a good thing. A new survey of 189 IT professionals attending the recent Amazon Web Services Global Summit conference in Chicago finds that while over half (54 percent) describe cost allocation being important to them, a full 82 percent say they find reconciling actual consumption of cloud service to billing to be a significant challenge. In fact, just under a third (31 percent) admit they don’t proactively manage their spending on public cloud services at all.

Nevertheless, 40 percent estimate that usage of public clouds inside their organization will increase 25 to 50 percent in the next 12 months, and another 38 percent pegged usage growth at between 10 to 25 percent. Only five percent said there would be no growth at all.

The survey conducted by the market research firm Dimensional Research on behalf of Cloud Cruiser, a provider of a software-as-a-service (SaaS) application used to manage spending on public clouds, also finds that development and testing remains the dominant use case for the cloud (59 percent). The next four largest use cases are Big Data analytics (31 percent), creating sandbox environments (30 percent), customer-facing applications (25 percent), and backup and recovery (19 percent).

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While the survey shows that many IT organizations need help managing their usage of public clouds, the survey also makes it clear that many internal IT organizations and finance departments have simply lost control of the public cloud. The reason for this is that it's so easy for a developer to spin up a virtual machine on a public cloud. When a developer has to request resources on premise, the internal IT department serves as a gatekeeper for allocating virtual machines. More often than not in a public cloud computing scenario developers simply end run internal IT altogether by programmatically spinning up virtual machine resources on a public cloud on their own. Chances are that situation will get worse before it gets better. With the advent of containers such as Docker, spinning up resources on a server is about to become even simpler.

The opportunity for IT service providers

This lack of basic financial management creates an opportunity for IT services providers to establish their relevancy in the age of the cloud. Most organizations need at the very least a basic assessment of what types of application workloads are running in the cloud today and which ones running on premise today might be better suited to run in a public cloud tomorrow. There are also applications running in public clouds now that over the long haul would be less expensive to run on premise.

Once an IT service provider proves their mettle by helping bring public cloud services back under financial control, the odds that an organization is going to trust that provider to help them manage those services increase substantially.

In the meantime, IT service providers should quietly root for increased public cloud consumption. After all, the more workloads that wind up in the cloud, the more probable it becomes those workloads will have to be integrated not only with other applications running on premise, but with ones running in other public clouds as well.

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Photo Credit: Joseph Vasquez via Flickr.com. Used under CC 2.0 License

Topics: Cloud Trends

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