Are we experiencing cloudflation?

The sticker shock of cloud computing bills has many in the C-suite looking for answers. A solid finops program can close the budget holes and pay for itself.

CSO  >  Money trouble  >  A one hundred-dollar bill with 'UH OH!' across Benjamin Franklin's mouth.

According to Gartner research in February, overall cloud investment will reach $544 billion this year. For those of you keeping score, that’s up 21% from the previous year. Is this good news? Depends on who you ask. The pandemic gave cloud computing a kick in the pants as enterprises quickly moved to the relative safety of public clouds. Also, public cloud providers performed well during the pandemic, and for many enterprises, cloud computing is now the only option for IT platforms.

While enterprise data centers continue to close, CFOs and CIOs with sticker shock are trying to figure out why their cloud bills are so high. In many instances, the opposite was promised when enterprise IT began its cloud journey. What happened?

Price increases account for some of the pain, but most of the unexpected bills I investigate are due to a lack of discipline with cloud cost spending and inadequate controls on that spending. It’s like someone complaining about a high electricity bill after they set the air conditioner to 60 degrees in the summer. What did they expect?

According to the recently published Anodot 2022 State of Cloud Cost Report, 54% of businesses report that their biggest cause of cloud waste is a lack of insight into cloud usage, and 37% said they were “taken aback” by their cloud charges or experienced an “event” involving cloud costs.

Sticker shock aside, the inability to gain accurate insight into cloud usage and expenses is the main problem, as reported by 53% of those surveyed. Moreover, complex cloud pricing and complex multicloud settings are cited as contributing problems by 50% and 49%, respectively.

The bottom line is that we jumped feetfirst into cloud computing with vague ideas about how we would track and control costs. Many critics cite the lack of a sound cloud finops program to monitor, track, and govern costs. The rudimentary problem right now is that companies have little or no insight into any cloud costs before they get the bill. In other words, if having a finops program scores a 9 out of 10 in terms of cloud cost management maturity, these companies are still at a 1 or 2.

This state exists because most enterprises did not see cloud coming—or coming as rapidly as it did due to the pandemic. As a result, they did not allocate budget and resources to manage cloud costs: the hard costs such as cloud computing bills for services, as well as soft costs such as the many expensive humans now needed to keep cloud-based systems running.

Here’s the good news: Implementing even a rudimentary finops strategy with cloud cost monitoring and controls will quickly pay for itself. Moreover, it will do so without diminishing cloud services. It accomplishes noninvasive cost savings partly by implementing basic housekeeping tasks, such as shutting down unused instances where the meter is still running or optimizing the use of cloud resources that lack current cost management, with options to automate as deeply as desired or required.

Early into cloud adoption, many in the industry foresaw this complexity crisis, including yours truly. It’s a repeating pattern that included the rise of PCs 30 years ago, then the move to service-oriented architecture, and now cloud computing. These changes all drove more costs than initially forecast or expected. It’s too bad we can’t nail these cost controls out of the gate, but at least we’re learning to identify the most expensive culprits sooner rather than later. Now that we know a prime culprit is the lack of monitoring, it’s time to get costs under control with a good finops strategy.

Copyright © 2022 IDG Communications, Inc.