Cloud has become the default choice for every business to deploy and manage their applications effectively. Almost every company today realizes the importance of cloud strategy and is moving some parts of its IT infrastructure to the cloud. The Forbes 2017 State Of Cloud Adoption report states that in the next 15 months, over 80% of all the IT budgets will be committed to cloud solutions.

The primary driver for companies moving to cloud is the opportunity cost (the speed of innovation and lower TCO) which the cloud offers when compared to on-premise. The on-demand availability and ‘pay-as-you-go’ models of public cloud vendors like AWS and Azure is certainly very enticing for new business experiments. In one of its 2013 reports, IDC states that the five-year total cost of ownership (TCO) of developing, deploying, and managing applications in AWS cloud represents a 72% savings when compared to deploying the same resources on-premises.

Fast forward to today, and almost every customer, small & medium businesses (SMB) as well as enterprises, are struggling with their cloud infrastructure costs after initial adoption due to lack of proper cloud strategy and governance mechanisms. At Botmetric, we have seen that the major problem that customers face with cloud adoption is with their cloud service expense management. Just a couple of years ago, cloud security was one of the major concerns, but now cost visibility and governance control has taken over as the primary challenge for businesses. This calls for a well thought cloud strategy.

As the Head of Product at one of the premier cloud management platforms, Botmetric, I frequently interact with hundreds of customers and top decision-makers. I have interacted with Head of Cloud Strategy, Head of IT, CIOs, CTOs, IT managers and even CFOs to understand their pain points. During my interaction over the past couple of years, I have realized that most of the customers who have started their business on cloud as well as the customers who have moved applications from on-premise, make many similar mistakes. Additionally, customers that move from on-premise often fail to unlearn a lot of things that can make their transition to cloud an overall success for a lower TCO.

Here are some of the common mistakes that many executives and managers make with respect to their cloud adoption strategy and practice, especially from the cost perspective.

New infrastructure but old mindset

This one is more applicable to enterprise companies adopting cloud and moving from large on-premise setups to cloud. While these companies moved their physical infrastructure to cloud, they often forget to make the necessary changes in their mindset and culture, required for seamless cloud management and operations. Many customers are still managing cloud as if it’s a traditional on-premise setup, and just the provisioning process has changed. This old-fashioned mindset has a cost explosive impact on cloud.

There is a significant change in terms of how one needs to approach planning, monitoring and managing cloud infrastructure compared to traditional IT.

No Upfront Governance Policies

Another critical observation that I made from all these conversations was the lack of basic governance processes and policies. Creating governance policies has always been an afterthought amongst most businesses. This leads to mismanagement and friction in thought processes amongst the business, product, engineering, and IT teams.

One example is the cloud resource tagging policy on AWS – On an average, over 60% of taggable cloud resources are not tagged or don’t have the mandatory tracking metadata to understand cloud usage across different teams and business units. Most cloud users are often struggling to understand enterprise wide spending by applications, teams and business units and bring parity in cloud usage and costing. A big chunk of expenditure is unaccounted for, leading to complete chaos at larger enterprises!

It is prudent to have a cloud resource and usage tagging policy in place from the very beginning. Therefore, while migrating to cloud, you must create business driven policies and principles that establishes right control over the lifecycle of your cloud infrastructure investments. All major public clouds provide enough levers to create and manage governance policies. Additionally, there are various third party tools and platforms to help you manage activities like cost allocation and budgeting on cloud.

Not effectively using pay-as-you-go

With cloud infrastructure, you get the freedom to provision on-demand IT resources. A lot of customers don’t invest enough time and effort on this aspect, leading to over-provisioning. I have seen customers architect systems with very optimistic number of resources, which may be required in the future if there is a spike. They fail to take advantage of new cloud constructs like auto-scaling or scheduled scaling. With cloud, you must use its basic tenet of elasticity like auto-scaling to optimize usage as much as possible, thus reducing the over-provisioning and overall cloud service expenses.

Not performing continuous cleanup

Lack of cloud usage monitoring leads to another major pain point for businesses spending on unused cloud resources like VM’s, databases, load balancers and networks. While this is something many customers have already made progress on by taking control with the help of emerging cloud management platforms like Botmetric. The habit and culture of continuous cloud usage monitoring and elimination of wasteful resources is yet to be built-in within overall cloud governance in enterprises. On an average, customers are wasting 5-25% of their cost on resources they no longer need. While cloud offers a “pay-as-you go” pricing model, as a business your usage model and culture should be “use-what-you-need” for effective resource utilization.

Missing DevOps Culture

The power of cloud can only be realized with proper cloud strategy and automation. Cloud makes it easy to automate provisioning, configuration management, deployments and recovery processes, but most businesses are yet to take complete advantage of DevOps. It’s important to nurture DevOps culture in your IT and engineering teams to reduce manual effort and increase reliability. Not incorporating DevOps automation as the center of your cloud adoption and usage strategy will only increase challenges in managing cloud services and applications.

Most of the customers that I have spoken to, have realised the mistakes mentioned above. They have taken initiatives to improve their overall cloud strategy and execution processes. If you are in the early stages of cloud adoption or facing cloud usage challenges, then hopefully this post can help you execute your cloud strategy more effectively.