Do Enterprises Know the True Costs of Cloud Expense Management Services?

6 October 2022 | Posted by Josh Paine

As cloud resources proliferate across a global enterprise’s environment, small missteps lead to hidden costs that continue to rise. Your monthly cloud bill only tells half the story. It’s only by digging deeper that you discover there’s much more to cloud costs.

There are Hidden Costs in Your Cloud Bill

Cloud technology provides businesses with greater agility and computing power than ever before. It’s never been more accessible to get the services you need to bring world-class services to your customers.

Yet despite this ease and power, public cloud billing is complex and confusing. And when your bills include multiple workloads and teams working all over the world, complete visibility seems impossible.

The final cost of your cloud services comes in an aggregated monthly bill. This includes a variety of services including storage, data transfer, and logging.

And after decades of auditing monthly aggregated telecoms bills, we at Cass know that when bills become bundled, there are hidden costs.

What Does Your Cloud Bill Include?

Let’s break down that aggregated bill. Everything you do in your cloud environment is chargeable. As standard, you pay for:

  • Control Plane
  • Compute
  • Storage
  • Logging
  • Networking
  • Data Transfer
  • Supporting Services & Applications

Every one of these costs can be audited and optimized to reduce your overall costs. In some instances, you need to shop around and find the best rates and costs for your infrastructure.

For example, if you’re deploying Kubernetes clusters on on-demand instances, the cost may vary depending on whether you use AWS or GCP.

Other costs, particularly data, require proactive management and visibility.

Want to curtail cloud costs? Download our comprehensive guide to public cloud cost management today.

Data Costs in the Cloud

Data costs in the cloud are split into three elements:

  1. Compute
  2. Data
  3. Bandwidth

1. Compute

Cloud platforms use autoscaling to dynamically adjust resources in line with demand. You pay less during periods of low traffic and more during periods of high traffic. So, you might think that compute is simply the amount you pay each month for every virtual machine in your estate.

But as demand increases, not only do server costs go up, so do logging costs. AWS charges around $0.41 per GB of log ingested over 5GB if you’re monitoring HTTP 2xx, 3xx & 4xx response codes using web application access logs 24x7 (this cost varies by what you’re monitoring and how often). These tiny costs add hundreds of dollars a day to your cloud bill.

The only way to tackle increased logging costs is to understand which components in your applications’ code are contributing/writing to the logs and finding ways to optimize that activity. Which logs do you need? Can you reduce the logs in particularly high-volume components that have recently increased in scale?

2. Data

Database engines offer a broad range of services—from high availability and multi-region to always-on and they all come with additional costs. Without complete visibility across your cloud environment, it’s difficult to know what data you have, where it’s stored, and how it’s being managed.

And you’re not just charged for the server space. Every time an application or a user sends a query to that dataset, there’s a data transfer cost of $0.05 - $0.20. That cost varies depending on the storage solution you’re using and how much data you’re moving.

For international organizations, things become even more complex. This is because data transfer rates differ from region to region. Brazil, for instance, charges 30-40% more than the US. So, if your servers relate to a third-party service located in a different availability zone, your cloud costs will change.

So not only could you be paying a transfer fee every time someone runs a query on your data, but there could also be gigabytes of obsolete data in expensive data warehouses, like Amazon’s Elastic File System that you don’t even need.

Critically evaluate your data. Decide what data you need to keep and how best to store it. If you need to preserve historical records for regulatory purposes, consider moving them to cold storage. It’s more cost-effective and helps you better organize your data.

3. Bandwidth

Accurately calculating bandwidth costs is notoriously difficult. Even Amazon hasn’t worked out a solution yet because there are so many variables.

This means that most enterprise-level organizations have no clear idea what their monthly bandwidth requirements are or how periods of high usage affect them. With so many factors to consider, many cloud expense managed service companies. Providers omit bandwidth from their cost optimization services. At the very least, they make it clear that they’re only able to provide a broad estimate, which makes optimization a serious challenge.

Get Control of Your Cloud Service Bills

Too many people accept bills at face value. To spot the hidden costs and optimize your environment, you need to be able to audit your bill more aggressively and have the tools to continuously improve the performance of your cloud infrastructure.

But multifaceted pricing structures, lack of standardization, and poor billing visibility make it difficult to control your cloud service costs. That’s where cloud spend management from an experienced provider can help. 

At Cass, our cloud management expertise is born from our experience in unpacking complex billing structures and technical infrastructure. We give you the clarity and rationalization that’s essential to the cost-effective running of your cloud environment.

Our cloud management services build upon your CSP tools and monitoring services, so you have a single view of the truth from which to manage your cloud estate. We also provide the human resource element that acts as an extension of your team.

We configure the technology to automate processes and undertake a human review of system recommendations for cost optimization. Cloud invoices are validated and allocated to your cost center along with a simple GL allocation file, which makes cloud expenses feel manageable again.

Topics: Cloud Management Services

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