Consolidated Billing Helps Optimize the Cloud Spend

Apr 20, 2017 4:39:05 PM

Back in 2009, the National Institute of Standards and Technology (NIST) drafted a formal definition of cloud computing. The definition states that the cloud has certain essential characteristics, including on-demand self-service, broad access, resource pooling and rapid elasticity. In addition, cloud services should have a metering capability so that resource usage can be monitored, controlled, reported and optimized.

Peter Mell and Tim Grance, authors of the NIST definition, probably didn’t envision how vast the cloud would become. Today, almost every organization has adopted at least one cloud service, and the vast majority are using two or more. According to the RightScale 2017 State of the Cloud Report, 85 percent of enterprises have adopted a multi-cloud strategy, and are using or experimenting with an average of eight different public and private clouds.

A multi-cloud strategy makes the metering component of cloud technology tricky.

Yes, cloud providers measure how much of their services you use and present you with a bill at the end of the month. However, most organizations simply pay the various invoices from cloud service providers without an overarching strategy for monitoring and managing cloud resource consumption.

One of the attractive features of the cloud is its pay-as-you-go-model, which enables organizations to avoid or delay capital investments and move infrastructure costs to the operational side of the ledger. But those costs can quickly mount as more cloud services are implemented. Without effective management and oversight, the organization won’t realize the financial benefits of the cloud.

The RightScale survey hints at this problem. Survey respondents estimate that 30 percent of their cloud spend is wasted, and that figure is likely low — RightScale puts actual cloud waste at 30 percent to 45 percent. Optimizing costs is now the No. 1 initiative across all cloud users surveyed. But despite this increased focus on cloud cost management, only a minority of organizations said they are taking steps to optimize cloud costs, such as shutting down unused workloads or selecting lower-cost clouds or regions.

Consolidated billing for public cloud services can help.

It’s just what it sounds like — you get one invoice for multiple, linked accounts, with a report summarizing all the cloud services consumed across those accounts. Consolidated billing help you:

  • Spot resources that are unneeded or underutilized so they can be reallocated to meet other requirements.
  • Streamline the process of determining how to chargeback cloud services to the appropriate business units.
  • Ensure that users are getting the right services at the right costs, and gain the visibility needed to make more-informed decisions.

Amazon Web Services (AWS) introduced consolidated billing last year, and some telcos and managed services providers that broker multiple cloud services provide consolidated billing and cost management. There are also a number of cloud cost analytics tools that roll up all of your cloud bills under a single dashboard for continuous monitoring and forecasting.

When defining the nature of cloud computing years ago, the experts at the NIST recognized the importance of monitoring and measuring cloud services to optimize costs and utilization. With a multi-cloud strategy now the norm, consolidated cloud billing has become an essential tool for effectively managing the cloud spend.

by Chris Norris, Sr. Director, Data Center Discipline

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Topics: Blog

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