Gartner forecasts that by 2026, 75% of organizations will primarily utilize the cloud for their digital transformation initiatives. With the growing adoption of cloud services by businesses, end-user spending is projected to increase by as much as 20% in 2024.

Is the Cloud a Cure-All Solution or Just a Passing Trend?

Ten years ago, the cloud revolutionized small startups. They didn’t need resources to build and maintain their infrastructure. Public cloud services, combined with accessible capital in a low-interest-rate environment, empowered these businesses to effectively cater to an expanding user community at a minimal expense. Favorable market circumstances facilitated the swift rise of cloud-native startups like Amazon and Netflix.

In the last decade, organizations shifted to using the cloud. They wanted to cut costs and innovate faster. “Cloud-first” strategies have gained prominence in the global agenda for digital transformation. Increasingly, companies are striving to migrate their entire infrastructures to cloud service providers.

However, not all transitions from Cloud 1.0 to Cloud 2.0 occur smoothly. Achieving comprehensive value across an entire enterprise can be challenging, and the return on investment in the cloud may appear minimal. As a result, many organizations think cloud benefits are declining. Why is this?

More tasks being managed in the cloud means a big increase in cloud costs. Businesses rely more on the cloud for important tasks and for storing large data. Demand for resources for AI and machine learning grows, needing GPUs and managing huge data, sometimes terabytes or petabytes.

As businesses advance, they meet challenges: more costs, complexity, and reliance on certain vendors. That is cloud sprawl, which can cause big problems.

Approximately 32% of a company’s cloud services budget is squandered, with 54% attributing this to a lack of clear comprehension regarding resource usage and efficiency.

To put it plainly, it’s similar to paying for apps and storage that you don’t even use. That is what we call cloud waste or shelfware, and it poses problems for customers, investors, partners, and the environment because it’s essentially throwing away both money and resources.

Right now, more and more people want tools to watch and cut down on cloud expenses. The FinOps sector, once small, is now booming with many companies competing for market share. Analysts predict this sector to reach $2.75 billion by 2023.

But dealing with challenges from cloud sprawl isn’t too difficult, and moving to the cloud can be advantageous for organizations.

Pre-Migration: Conduct a Thorough Assessment of Resources

A poorly executed transition from on-premises to the cloud can exhaust an entire year’s budget within just a few months. The difficulty lies in precisely assessing the performance requirements of workloads in the new cloud environment. Discrepancies between on-premises and cloud provisioning can lead to incorrect resource allocation decisions if not promptly rectified.

Many inexperienced IT managers rush into cloud migration, sometimes transferring their entire on-premises infrastructure all at once. That could lead to overpaying for too many cloud resources or not having enough resources to handle the workload. Both situations can mess up business operations and cause surprise expenses.

During Migration: Implement Micro-Change Management

Following the micro-change philosophy involves breaking down big changes into smaller, incremental steps known as “Routine +1”.

​This method helps organizations prevent modernization from becoming a huge, daunting project. They can make progress within a more manageable budget. 

Typically, a cloud migration project is just a part of a bigger plan to update old applications. It’s advised to opt for an incremental cloud migration path. That means dividing migration projects into smaller parts, requiring fewer resources. Each step in the process brings in new code, slowly replacing the old code until the whole system is upgraded.

During this transition, the system keeps running smoothly while you can focus on improving important user experiences and give priority to key and commonly used tasks. For instance, in a project management app, this might include tasks like creating new projects, assigning team members, and managing resources.

Also, think about moving non-essential functions from core apps to third-party SaaS/PaaS solutions. Keeping non-core tasks in-house can be costly. By outsourcing less critical tasks, a company can concentrate its resources on its main strengths. For example, product development, customer support, marketing, etc.

Working with a contractor, it’s recommended to choose a multi-step approach, starting with a thorough discovery phase, followed by a proof of concept (POC), and using a time and material pricing model where the customer pays for each completed task.

Post-Migration: Ensure Integration of a User-Friendly Analytics System

Using multiple monitoring tools can be tricky because they give different data outputs. That makes it harder to figure out what’s causing performance problems or overspending, and it’s tough to see the full impact of incidents or their causes. That makes fixing them take longer.

To deal with this, you can bring all your tools together into one analytics platform. This platform combines technical data from different monitoring tools using APIs and displays them on a customizable dashboard with proactive alerts.

The alert system has two types:

• Fixed alerts are set to stop things going over a certain limit. For example, in a bank, if there’s any unauthorized access to important data like credit card info, a fixed alert would go off right away.
• Adaptive alerts change over time to keep an eye on unusual behavior in the data. For instance, during a move to the cloud, adaptive cost alerts help manage spending by looking at things like storage, bandwidth, and computing power. Let’s say you usually spend $3,000 a month on the cloud, but you’re starting to use more resources. These alerts can automatically raise your spending limit, up to $3,500 over a year, without bothering you. If something unexpected happens, like suddenly using a lot more database storage, your team gets a quick alert.

To Wrap-up

Many inexperienced IT managers rush into cloud migration, transferring all their on-premises infrastructure at once. But striking a balance between quick fixes and long-term transformation benefits is vital. Micro-change management can be your ace in the hole, empowering you to effectively tackle this challenge.

Published by: Martin De Juan