The level of spending on cloud computing services has reached new heights. More organizations are recognizing how much they waste on cloud spending. A survey of over 300 IT professionals in the U.S. published in October finds more than three-quarters of respondents (78 percent) estimate that anywhere from 21 to 50 percent of their organization’s spending on cloud services is wasted.
The survey, conducted by Stacklet, reveals that 51 percent of respondents estimate they waste more than 40 percent of their cloud spend.
The primary reasons cited for lack of control over cloud resources include dependence on inefficient manual processes (52 percent), inability to control cloud usage (51 percent), lack of best practices (47 percent), limited visibility (45 percent), and lack of timely action by engineering teams (40 percent).
The most common sources of inefficiency cited are excessive log/data retention (50 percent), incorrect resource sizing/type (49 percent), costly artificial intelligence (AI) experiments (48 percent), outdated instance types (48 percent), misconfigured networking (48 percent) and application development systems running during off-hours (47 percent).
A full 88 percent of respondents encounter these issues several times yearly. Additionally, 50 percent experience them monthly or weekly, and 62 percent report mistakes costing their organization more than $25,000 per month.
That adds up to roughly $300,000 a year. This leaves a lot of room for a managed service provider (MSP) to provide a cloud optimization service that, from a customer perspective, all but pays for itself.
Things are likely to get worse in the age of artificial intelligence (AI). A full 82 percent of respondents agree AI is fueling increased cloud complexity and spending, the survey reveals.
Cloud overprovisioning leads to wasted spending
In general, application developers tend to overprovision cloud resources, leading to most of the wasted spending on cloud services. Application developers typically provision cloud resources themselves and their primary concern is to make sure their applications don’t fail. As a result, they will often provision as much IT infrastructure as possible. Much of that infrastructure, however, winds up sitting idle.
Worse yet, organizations often provision cloud infrastructure resources with little to no supervision. It’s not uncommon for finance teams to be surprised by an unexpected spike in their monthly cloud computing bill. This is simply because no one was aware of how much it costs to experiment with AI models hosted in the cloud.
In an ideal world, application developers would have real-time access to cost metrics while provisioning infrastructure resources. Most application developers will make better choices once they become aware of cost issues. However, mistakes will always be made, so the need for supervision will remain.
MSPs can help control cloud costs
MSPs, of course, are already in a good position to provide the visibility needed to control costs. The reasons more organizations don’t manage cloud spending more closely are as much cultural as they are technical. Many have become convinced that anything that might hamper developer productivity will slow down the pace of innovation. The truth of that matter, however, is that a lot of bad habits are leading organizations to waste a lot of money that in these trying economic times could certainly be better applied elsewhere.
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