Have you ever run out of storage at home and resorted to buying more bins without organizing what you already have? Businesses often do the same when moving data to the cloud. It’s certainly trendy to talk about “cloud-based solutions,” but migrating years’ worth of business data to the cloud is a more expensive proposition than most people realize. Here’s how cloud spending can spiral out of control—and the effective strategies you need for cost optimization.
- Transitioning to cloud environments without a strategy can lead to inefficient resource allocation and higher expenses.
- Legacy systems often result in redundant resources. Overprovisioning and underutilization further inflate costs.
- Without a robust FinOps framework, businesses risk inefficient cost decisions amidst complex pricing models.
Contact TenHats to optimize your cloud costs, identify savings opportunities, and enhance operational efficiency.
How Cloud Spending Gets Out of Control
Strategic, selective cloud migration is essential to avoid escalating costs and inefficiencies. Without a financial operations framework and strategic planning, inefficient decisions can further increase costs.
1. Moving everything
Moving your company’s data to a cloud environment without a strategic plan can lead to uncontrolled spending. Rather than moving what needs to be moved, businesses may transfer all of their on-premise data to the cloud without consolidating data usage or optimizing storage space. This lack of planning results in inefficient data management.
Additionally, database applications frequently create containers and structures that consume space without offering any tangible benefits. These unnecessary elements inflate storage costs and lead to higher-than-expected expenses.
To avoid this, companies should develop a comprehensive cloud migration strategy that focuses on data consolidation, storage optimization, and the regular monitoring of resource usage. These inefficiencies compound over time, inflating operational expenses. Without carefully planning your data center migration, your business risks losing cost visibility and control in the cloud.
2. Overprovisioning
Overprovisioning in the cloud occurs when a business purchases resources based on anticipated future needs, like growing into a multi-location business, rather than current requirements. IT professionals are used to this kind of planning ahead because in basically every other context it makes sense.
Usually, you do want extra resources on hand. But that mindset, even though well-intentioned, is what costs companies money here. This can lead to unnecessary expenses and overlooking opportunities for cloud cost optimization as resources sit idle or underused.
While Microsoft Azure’s pay-as-you-go model offers flexibility, businesses can still overpay for unused features or excessive capacity.
3. Underutilization
For many businesses, increasing the IT budget is the right move since it can help with cloud spending costs and lack of resources. Underutilization sometimes stems from a skills gap. The problem is when businesses lack cloud management expertise, they may leave virtual machines or databases running needlessly, akin to leaving the AC on during a week-long vacation. These idle resources accumulate costs without delivering value.
Proper cloud management skills are essential to identify and shut down underutilized services, ensuring efficient use of resources. Otherwise, your business risks overspending on unused capacity, driving up its cloud expenses, undermining potential savings and efficiency.
4. Poor optimization
Cloud pricing is complicated, encompassing storage, transfer rates, uptime, and more. Without a financial operation framework (FinOps), your businesses may frequently be making inefficient cost decisions.
For example, inefficient data transfer timing and poor architecture can lead to:
- Increased processing time
- Higher bandwidth usage
- Unnecessary storage
This results in escalated operational costs and reduced performance.
A lack of data governance strategy (a structured approach to managing an organization’s data assets) makes this issue worse. Effective cloud cost optimization and strategic planning are essential to control expenses and ensure resource efficiency.
How a Consultant Can Help
Working with a consultant can significantly enhance cloud cost optimization, enabling your organization to achieve substantial savings and improve its operational efficiency. A thorough audit of your existing cloud services by a consultant can help determine actual usage.
This detailed analysis helps identify:
- Underutilized resources
- Redundant services
- Opportunities for cost reduction
By understanding your specific needs and current setup, consultants can pinpoint inefficiencies that might be overlooked internally.
Cloud providers often have complex and opaque pricing models, making it challenging for businesses to determine if they are getting the best value. A consultant brings insider knowledge of these pricing structures, offering insights that cloud providers may not disclose.
They can identify areas where you are overspending and suggest more cost-effective alternatives. This expertise ensures that you are not paying for unnecessary features or services.
Based on a consultant’s review, you receive strategic recommendations tailored to your business’s needs. These may include getting better performance and cost-effectiveness by:
- Optimizing storage and compute resources
- Improving data transfer efficiency
- Restructuring your cloud architecture
They also guide you on adopting FinOps to help make more informed and cost-conscious decisions.
Hiring a consultant for cloud cost optimization can result in significant savings that far exceed the consulting fees. Their expertise and strategic guidance help you eliminate wasteful spending and optimize resource allocation, leading to better financial outcomes.
Work with TenHats
Partnering with TenHats as your cloud consultant can significantly enhance cloud cost optimization and overall operational efficiency. At TenHats, we specialize in Azure, Microsoft 365, and a range of other business technologies. Our in-depth knowledge of these platforms allows us to tailor solutions that precisely meet your needs.
We understand the intricacies of cloud pricing models and how to leverage the features of these services to maximize value while minimizing costs. Our team can help you navigate complex pricing structures, ensuring that you’re not overpaying for unnecessary features or underutilized resources.
Our experience in cloud architecture and colocation data center management means we’re equipped to offer a variety of solutions to solve your specific challenges. We have the expertise to deliver results by assessing your current setup and identifying areas where improvements can be made. This ensures that your cloud environment is cost-effective and high-performing.
We start with a thorough audit of your current cloud services, examining actual usage and operational efficiency. With our insider knowledge of cloud provider pricing structures, we can pinpoint areas where you are overspending and suggest more cost-effective alternatives.
By partnering with TenHats, you can ensure that your cloud environment is optimized for cost-efficiency and performance, allowing you to focus on what you do best: running your business.
Transitioning to the cloud without a defined strategy can lead to inefficient resource use and higher costs. Legacy systems often lack efficiency, causing redundancy. Overprovisioning and underutilization further drive up costs. Without a robust FinOps framework, businesses struggle with complex pricing. TenHats specializes in optimizing cloud spending, identifying savings opportunities, and enhancing operational efficiency.
In 2016, TenHats built the region’s first purpose-built colocation data center in over 20 years. Located in Knoxville, TN, our data center can serve any organization in East Tennessee and beyond. With our team’s IT experience, we provide a lot more than simply protected data. When you call us, you talk to a real IT expert. Connect with our team about our data center today!
