Cloud-based solutions can offer your business a way to provide a scalable and reliable IT infrastructure that supports the company’s development and growth. But it needs to be actively managed to control potential hidden costs (and it can be harder to ensure cloud spending is actually driving growth).

Cloud helps businesses to ensure business continuity by guaranteeing backup solutions and reliable disaster recovery, which would otherwise be costly and time-consuming to manage on-premise. The ability to gain quick access to data after a failure results in less downtime and saves the business time and money.

But, for business to get full value from the cloud, it needs a cost-efficient and scalable infrastructure in place – one that constantly adapts to business needs and that doesn’t cost a fortune in the process. Cloud-based solutions also reduce IT management overheads because the organization can use a pay-as-you-go model, only paying for what it uses. This allows the business to scale more efficiently.

There’s been a rise in cloud costs as more businesses adopt the technology. This is contrary to what you might expect from a technology that is often considered as a means to reduce technology costs in an organization, rather than increase them.

It can be hard for individual businesses to manage as costs are often extremely difficult to track (and things like undetected architecture mistakes often account for a significant increase in cloud costs). So, it’s not uncommon to see businesses left with higher than predicted costs to get the same value from the technology.

But, where do these costs come from? Well, for one, unexpected costs could come from misjudging the organization’s IT infrastructure requirements. The business could overestimate the cloud resources it needs, and some of that stays idle – contributing to the cost but not the value. Conversely, if the business’ resources are handling a higher capacity than it expected, it will see an increase in the cost of managing the excess.

How can businesses reduce the cost of cloud?

Visibility and optimisation are key factors in monitoring cloud resource usage and reducing costs. Billing information needs to be transparent. An invoice isn’t enough – costs should be categorized by service, so the organization can identify exactly where the cost is going. That spending can then be tied back to a team or project, which gives greater visibility into organizational structure and means it can track what resources are being used by various teams.

Detailed, service-based cost information means organizations can evaluate what they are spending where, identify where resources should be reduced or increased, and optimize the service (and associated costs). 

Businesses also must ensure that each cloud service is right-sized for the applications running on it. One advantage of working with the major cloud service providers is that they offer various billing alarms, which businesses can configure to warn them of unexpected usage or unpredicted cost spikes.