Enterprises Struggle with Managing Cloud Costs

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Most organizations are using the public cloud, 92 percent in fact, according to a new report (registration required) from Dimensional Research and Cloud Cruiser, a cloud financial management specialist.

Back in April, the companies quizzed 189 IT professionals during the Amazon Web Services (AWS) Global Summit in Chicago. Apart from finding that public cloud use is already widespread in the enterprise, its use is expected to grow further. Ninety-five percent of those surveyed said they expect their public cloud usage to expand over the next 12 months.

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It’s good news for the likes of AWS, Microsoft Azure, IBM SoftLayer and other cloud providers that cater to businesses. But their customers’ IT budgeting personnel and finance departments may feel differently about the matter.

Most organizations are suffering from a massive blind spot when it comes to budgeting for their public cloud services and making certain they are getting their money’s worth.

Nearly a third of respondents said that they aren’t proactively managing cloud spend and usage, the study found. A whopping 82 percent said they encountered difficulties reconciling bills for cloud services with their finance departments.

“The top challenge with the continuously growing public cloud resource is the ability to manage allocation usage and costs,” stated the report. “IT and Finance continue to have difficulty working together to ascertain and allocate public cloud usage, and IT continues to struggle with technologies that will gather and track public cloud usage information.”

In terms of managing cloud services, cloud cost and reporting (54 percent) emerged as the top priority, followed by performance management (46 percent) and resource optimization (45 percent). Driving demand for the public cloud, at least in terms of AWS, are application development and testing (59 percent) and big data and analytics (31 percent).

David Gehringer, principal at Dimensional Research, believes it’s time for enterprises to quit treating the cloud differently and adopt IT monitoring and cost-control measures similar to those used in their own data centers.

“The survey results show that, despite significant investment in public cloud, IT continues to struggle with technologies that will help them analyze public cloud usage,” said Gehringer in a statement. “IT requires a solution that can effectively manage and allocate public cloud use so they can have a fact-based conversation with the business that everyone can understand.”

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.