Cloud computing has made it significantly easier for businesses to manage and store data. Reports have become more streamlined and insights more meaningful.
Overall, business decision-making processes have improved, but a firm’s budgetary cost structure has changed significantly.
Cloud cost management can differ based on whether it is single cloud and multi-cloud.
Also Read: Cloud Computing is Changing the Business World
Discover the factors that impact cloud cost management for both architectures.
Firms must develop a proper understanding of the efficiency and complexity of cloud cost management.
Single Cloud Cost Management
The firm uses the services of a single cloud vendor for all their business needs.
The cost benefits of having a single provider are:
- Easier Billing: A single cloud vendor means that only one consolidated bill is received, making cost management easier.
- Better Integration: Since the entire structure is managed by one entity, integration with existing processes is much easier.
- Opportunity for Discounts: Many vendors provide discounts to customers based on the volume of service used.
Although, there are some drawbacks as well:
- Vendor Lock-In: There are limited models and pricing options when sticking with one vendor.
- Lower Flexibility and Scalability: Requirements of a firm change all the time. So, if you want to upgrade or change your service, you’re in the hands of the vendor.
- Downtime Risks: Server outages are common and any disruption to business operations can cause major revenue loss.
Thus, appropriate cost management strategies should be incorporated by those with single cloud architecture.
How to Better Manage Costs
If you have conducted thorough research and have a solid cloud vendor, then you can opt for a reserved instance or savings plans. These are offered by the provider which lowers the cost if there is a guarantee of a longer commitment.
Additionally, it is critically properly track and frequently monitor service use. Make use of cloud cost management tools to measure expenditure.
Multi-Cloud Cost Management
The firm uses the services of multiple different cloud vendors according to their needs.
The cost benefits of having multiple providers are:
- Prevents Vendor Lock-In: Having multiple vendors allows firms to avoid vendor lock-in and prevents over dependency.
- Take Advantage of Services: Firms can optimize costs by using a basket of vendors and their different services according to needs.
- Better DR Management: Resources are distributed across multiple environments which improves resilience and limits downtime during disasters.
Although, there are some drawbacks as well:
- Complex Management: Coordinating between each cloud environment is complex.
- Difficulty in Tracking Costs: Different vendors have different pricing models. Managing reports and tracking expenditure requires additional investments.
Thus, appropriate cost management strategies should be incorporated by those with multi-cloud architecture.
How to Better Manage Costs
Complication generated from using multiple vendors is unavoidable. The best strategy, albeit with added costs, is to use a cost management tool or third-party to track spending for all vendors.
Since services used are different based on provider, each vendor could be allocated a specific budget to prevent overspending.
Closing Thoughts
Both types of architecture have their own pros and cons that affect cloud cost management. Using the services of a single vendor or opting for multiple is based on the firm’s needs.
So, the best strategy is to avail the benefits to the maximum and offset the drawbacks with better cloud cost management.
