The more business and IT leaders worry about cloud costs, the more relevant managed service providers become. As far as cloud spending is concerned, the level of financial oversight being applied by organizations is slim to none. In the name of making IT more agile, developers have been given almost carte blanche when it comes to being allowed to spin up virtual machines on public clouds. Regaining control over how IT dollars are allocated in the cloud continues to be a major struggle within most IT organizations.
In fact, the 2019 State of the Cloud Report published by RightScale, a provider of cloud management tools that is a unit of Flexera, finds, for the third year in a row, that of the 786 IT leaders surveyed, 64 percent said optimizing existing cloud use for cost savings is the top initiative in 2019. That’s up six percentage points from the year before.
The RightScale report reveals that enterprises plan to spend 24 percent more on the public cloud in 2019 versus 2018. Survey respondents estimate 27 percent of that spending is wasted in 2019. Half of respondents say they now plan to spend more than $1.2 million annually on public cloud. The survey also shows that organizations leverage almost five clouds on average. Respondents are already running applications in a combination of 3.4 public and private clouds and experimenting with 1.5 more for a total of 4.9 clouds.
Struggles to monitor spending
Obviously, that level of spending means billions of dollars is now being poured into these services. To help organizations gain access to the tools and best practices required to apply some discipline to how those dollars are spent, Atlassian, Autodesk, Cloudability, HERE Technologies, Just Eat, and Nationwide announced the formation of a FinOps Foundation. Via this joint effort, the companies plan to identify and share best practices for reining in cloud spending. A survey of 300 finance and IT leaders conducted by 451 Research acknowledges that most organizations don’t have much visibility into that spending. Almost three-quarters (72 percent) of finance executives stated they have no formal reporting capacity between departments. More than half (51 percent) of respondents admitted to occasionally overspending and 68 percent are only alerted to overspend when it’s too late to do anything about it.
Most managed service providers have already developed the tools and expertise required to manage and control cloud spending. What most of them have not done is build a dedicated practice around helping organizations achieve that specific goal. Given the level of rising concern over cloud spending, one of the easiest ways for any MSP to start a relationship with a new customer is to provide the analytics required to measure cloud spending. There’s usually no love lost between developers, internal IT teams, and the finance department. MSPs are in a unique position to provide a set of cloud spending metrics that all three parties will trust.
Of course, the degree MSPs want to charge for that service may vary. Once an MSP establishes trust, it’s only a matter of time before that MSP gets asked to take on additional responsibilities. Once MSPs do start to take on those tasks, many will quickly discover that having earned the trust of major stakeholders in that organization is nothing short of priceless.
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