Businesses fail to grasp the true cost of public cloud

Organisations are failing to grasp the true cost of public cloud services. In a study of 500 IT professionals conducted in December 2018 by cloud resource management company Densify, more than one-third of organisations admitted to being unable to keep up with and understand the impact of new cloud provider service introductions and billing option changes.

More than 40% said they had overspent on public cloud, while 32% admitted they did not know if they were overspending.

Compared to 2017, more people were aware of their cloud spend (68% versus 58%), even as cost optimisation lagged behind other cloud management concerns for the majority of IT professionals.

Despite the continued growth of public cloud infrastructure use among respondents, 45% reported needing better management visibility into their public cloud workloads, including when compared to their abilities to manage on-premise workloads.

This is troubling, as mitigating operational risks – where management visibility into workloads is a requirement – was overwhelmingly cited as the chief priority going into 2019, the Densify survey noted.

The majority (91%) of enterprises have hybrid cloud infrastructure, meaning they are running cloud technology on-premise and in the public cloud.

However, 35% of those with hybrid cloud infrastructure admitted they have less visibility into their public cloud infrastructure, compared with their legacy on-premise IT environment. More than a fifth (22%) ranked cloud spending reduction as their top priority for public cloud management in 2019.

Commenting on the results, Andrew Hillier, chief technology officer at Densify, said: “In terms of visibility, the on-premise virtual machine [VM] world is a well-oiled machine. In the cloud, there is a regression in terms of maturity.

“Looking at spending doesn’t give all the details you need. You can get a bill, but you are not sure what business group incurred the spending. This requires a greater level of detail. If you have a bursty app, it is much cheaper to run in cloud, while a more stable workload would run at lower cost on-premise.”

According to Hillier, people are buying the wrong cloud services in the cloud. He said many are not aware of the various options available, adding that he is “seeing a lot of wastage”.

This could be because IT is applying techniques from running VM infrastructure to cloud operations. “With a VM, overcommitting is a big feature because you can give out resources to multiple VMs,” he said. If a resource is not being used by one VM, the resource is available to others.

But Hillier warned that this is exepsnive in the cloud, as a workload is allocated a fixed amount of cloud resources, even if the resources are not needed. “The cloud is expensive because you pay for resources not being used,” he said.