As organizations increase their use of public cloud services, managing cloud resources becomes a vexing challenge. While cloud buyers often see these issues as a technology problem, this approach can be self-defeating. More experienced cloud adopters have learned to take a holistic approach, calling for overall cloud management – from architecture and procurement, to operations and cost management.
Cloud Management is a Complex Challenge
Public cloud usage continues to grow rapidly. This growth, along with the complexity of public cloud architectures and purchasing options, makes managing and optimizing cloud usage – and cloud spending – increasingly difficult. Many industry analysts report that cloud management is a critical issue for users of all public cloud platforms.
According to the RightScale 2019 State of the Cloud report, managing cloud resources was a challenge for 77% of organizations of every type and maturity level. With the challenge so widespread, it’s not surprising that optimizing cloud usage is a top priority initiative for CIOs and CFOs.
Cloud adoption can lead to real financial benefits, but it’s not always easy. Many companies migrate systems to public clouds expecting significant savings, but are soon confronted with cost overruns, inability to forecast, and volatile cloud spending.
Cloud migrations typically focus on architecture, performance and reliability, with financial management often a neglected factor. This can cause unpleasant surprises when cloud vendor invoices begin to arrive! Gartner recently predicted that in 2020, 80% of organizations will overshoot their cloud budgets due to poor cloud cost management. This is challenging for both IT and finance leaders.
Tools Help, but More is Needed
Technical teams are usually responsible for cloud spending — but this is not their primary focus area or core skill. Cloud teams typically often refer to blogs, whitepapers and books for additional financial guidance on optimizing cloud spending. Cloud vendor tools are also available for reporting, analyzing, and forecasting cloud spending. Third-party cloud management platforms such as Cloudability, Flexera and CloudCheckr, can provide additional capabilities to manage cloud costs. But even with these tools, managing cloud costs remains a persistent challenge in complex and changing environments. So what’s missing?
Governance is Urgently Needed
Organizations struggle to manage cloud financials without effective cross-functional Cloud Governance. Flexible cloud architectures and variable cloud consumption requires new ways of thinking, new processes, and new skills – across the organization – to proactively manage cloud usage from beginning to end. The need for better Cloud Governance has become urgently clear.
Improved Cloud Governance is an important objective for many organizations. According to RightScale’s 2019 State of the Cloud report, governance is a high priority for 79% of respondents — for all types of organizations, at each stage of maturity for cloud adoption.
What is Cloud Governance?
Cloud Governance is the practice of managing lifecycle processes across the organization to align cloud implementations with business and financial strategy. Cloud Governance is both “art” and “science”, and key to achieving cloud operational objectives and meeting financial goals.
Balancing and coordinating the priorities of Engineering, Operations, and Finance is critical to good Cloud Governance. Cloud Governance includes many non-technical business and operational policies which must be tuned to the organization’s specific needs and characteristics.
Cloud Governance processes and methods should make sure cloud architecture, procurement, and operations are tightly aligned with each other across functions, and in line with overall financial objectives. Defining the right mechanisms in advance is important, to manage cloud spending visibility, accountability and control of cloud resources, throughout the cloud deployment lifecycle.
The Payoff
Companies see significant benefits across the organization through the “art and science” of Cloud Governance in each step of the cloud lifecycle – from initial planning to achieving long-term ROI. Architecture, procurement, and cost optimization challenges can all be confidently addressed with well-defined and comprehensive Cloud Governance practices. This is good news for CIOs and CFOs – and their teams – as cloud becomes more central to their growth strategies.