Consider this advice for managing people, governance processes, and automated tools to prevent end-of-month cloud bill surprises.

Beth Stackpole, Contributor

June 1, 2012

4 Min Read

Amazon's 7 Cloud Advantages: Hype Vs. Reality

Amazon's 7 Cloud Advantages: Hype Vs. Reality

Amazon's 7 Cloud Advantages: Hype Vs. Reality (click image for larger view and for slideshow)

There's no magic potion for stamping out cloud computing's copious hidden costs. Rather, the answer lies with getting serious about tried-and-true best practices to deliver enough real-time visibility so there are no surprises when the bill arrives.

"Transparency is really the challenge, especially when you're looking at costs across various public clouds," notes Dave Zabrowski, founder and CEO of CloudCruiser, a cloud cost-management platform. "There are very tangible hidden costs that can be eliminated just with transparency of knowledge."

For example, consider the simple problem of over-allocation. Companies typically sign up for public cloud computing power or storage capacity with the assumption that their workloads command a specific instance--therefore, they err on the side of over-provisioning and lock in at a higher price just to make sure they are covered. "But what happens is a lot is the workloads in real life aren't as demanding as people think," Zabrowski explains. "By having transparency into usage vs. allocation, for example, companies within hours can downgrade to a cheaper instance."

[ For more on hidden cloud costs, read 4 Causes Of Cloud Bill Shock. ]

The formula for transparency is pretty straightforward, according to experts, but that doesn't mean it's easy to pull off. It involves putting the right people, processes, and tools in place to ensure clear visibility and that agile reconfiguring can happen on the fly. Here are the top four areas to focus on:

1) Tools, tools, and more tools. There is no shortage of cloud management and cloud cost-management tools on the market, and most experts agree that some combination of tools can deliver much of the requisite visibility and automation that can help IT organizations stay on top of their cloud environments. Tools like CloudCruiser and Cloudyn, for instance, can produce those usage vs. allocation reports to help companies continuously fine-tune their instances to optimize cost.

Cloudyn employs algorithms to make recommendations around proper provisioning, pricing models, and tradeoffs between cost and performance. Other tools, like Progress Software, allow alerts to be set so companies are automatically notified, for instance, if usage runs over, based on predefined thresholds. "It's not just management tools--it's actually visibility and real-time monitoring so you don't find about things after the fact," says Colleen Smith, vice president, SaaS and cloud computing at Progress. "It's the only way to avoid end-of-the-month bill shock."

2. Establish clear cost-management processes. It's as much about tools as it is about process, experts say. With traditional IT deployments, IT had control and there were clear processes in place around approval and provisioning. Not so in the cloud world. "Mature IT departments have specific policies as to who can do what and what size machines can be provisioned--they have all that governance in place," notes Michael Melillo, senior user experience engineer for SHI Labs, who is helping to architect the Infrastructure-as-a-Service (IaaS) provider's cloud platform. "Typically, when you go to the cloud, those same tools are not there."

To help its IaaS customers create and enforce those governance policies, SHI Labs is offering its customers a portal, built around CloudCruiser, where they can pull detailed resource allocation reports, establish budget thresholds, and perform other cost-management tasks. "This gives them the visibility that was lacking and it's not just a bill at the end of the month," Melillo explains. "Having an audit trail along with proactive notification and thresholding is incredibly beneficial."

3. Create a dedicated management role. A move to the cloud doesn't mean all hands off deck. On the contrary, it's critical for IT organizations making the transformation to IT service management provider to retain dedicated management committed to managing and monitoring the environment for cost efficiencies. "You have to leverage domain expertise in cost management that exists within the organization," says Cloudyn CEO Sharon Wagner. "It's their responsibility to look for the right cloud vendors, negotiate (when they can) compelling business terms, and create streamlined processes that will support cloud provisioning."

4. Automate, but don't leave the human side out of the equation. While many of these checks and balances can be accomplished via automated cost management and monitoring tools, there's still a requirement for humans--both business users and IT--to work through the proper governance and rules of engagement. "There's a reason why it took three weeks or three months to get IT to set up a new server--you had to go through certain levels of approvals and processes," notes Progress' Smith. "While you can automate those in the cloud, you still have to think through the rules that govern cloud usage."

The pay-as-you go nature of the cloud makes ROI calculation seem easy. It’s not. Also in the new, all-digital Cloud Calculations InformationWeek supplement: Why infrastructure-as-a-service is a bad deal. (Free registration required.)

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