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Despite rising concerns about the cost of cloud computing, a new report finds more than half of organizations do not make use of Saving Plans or Reserved Instances. These plans, available on the Amazon Web Services (AWS) cloud, make it less expensive to run application workloads.

ProsperOps, a provider of cloud cost management platform, shared an analysis of AWS Cost and Usage Reports recently. The analysis showed that less than half of organizations are actively taking advantage of any type of commitment-based discounts.

Given that AWS generated $88 billion in revenue last year, the potential savings are upwards of billions with proper cloud optimization and FinOps best practices.

Lack of discipline hampers FinOps

FinOps is a discipline that promotes a shared responsibility for an organization’s cloud computing infrastructure and costs. The goal is to unite disparate procurement teams to identify and approve costs, enforce policies, and perform usage best practices. The FinOps Foundation, an arm of the Linux Foundation, has been defining a set of best FinOps practices. However, many organizations lack the discipline required to implement them.

One of the major reasons organizations lack this discipline is because they allow application developers to provision cloud resources. It’s not until the end of the month for when finance teams are alerted that something is amiss with a hefty bill.

MSPs have the expertise to help businesses control spending

That lack of visibility into cloud spending naturally creates consulting opportunities for managed service providers (MSPs). Especially those who master the nuances of cloud computing in ways few internal IT teams are able to match. Sharing that expertise can often open doors to other opportunities. Business and finance leaders will realize how much of the IT budget allocated to cloud services is being spent recklessly.

Running application workloads in the cloud is fundamentally different than running them in an on-premises IT environment. Costs are largely fixed. When applications are moved to the cloud, additional storage and cybersecurity costs are generated, which many developers are not familiar. Without a holistic view of consumption and infrastructure resources allocation, it is hard to have a good grasp on expenses.

MSPs are poised to offer education to finance executives, they will likely be the first to seek assistance, and give them a better understanding on how IT budget is being consumed. It’s only a short walk down the proverbial hall to an IT department that may not be inclined to admit just how much of the spending on cloud services has moved beyond its control. The one thing that everyone will be able to agree on, however, is there are plenty of other projects that could get funded if much of the current spend wasn’t already going to waste.

Photo: DmZ / Shutterstock

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Mike Vizard

Posted by Mike Vizard

Mike Vizard has covered IT for more than 25 years, and has edited or contributed to a number of tech publications including InfoWorld, eWeek, CRN, Baseline, ComputerWorld, TMCNet, and Digital Review. He currently blogs for IT Business Edge and contributes to CIOinsight, The Channel Insider, Programmableweb and Slashdot. Mike blogs about emerging cloud technology for Smarter MSP.

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