Enterprises are missing out by not optimizing cloud spending, not going multicloud

Introduction

Across the global IaaS market, businesses are missing out on significant savings by sticking to ondemand pricing. Cloud providers have created an array of cost-saving mechanisms that many, but certainly not all, businesses are taking advantage of. The benefits of optimization often outweigh the benefit of migrating. Although pursuing a multicloud model for cost arbitrage can be challenging, direct cloud costs can plummet as a result.

The 451 Take

For new applications, enterprises should choose the cloud service that best suits their needs in terms of both cost and business requirements. Optimizing – by purchasing capacity in advance or setting up workloads to scale resources dynamically – can squeeze costs even further without impacting performance. However, our research suggests businesses are leaving $6bn of cost savings on the table by using only on-demand pricing. A bit of time and effort can deliver huge savings, and cloud providers already make tools available to do this. For the providers, the benefits are better cash flow, greater predictability and lower costs. Many third-party tools can also optimize cloud use, even across multiple clouds, and building an application that spans venues can yield vast savings on direct cloud costs. However, this isn't easy, and companies face a raft of technical, process and people challenges in doing so. The first step for all cloud users should be to look at what they do today and see if optimization can work for them.

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