How to Achieve Cloud Cost Savings by Avoiding These Cost Overruns

Any company that runs for long enough will inevitably run into cost overruns; the key, though, is to minimise the number of cost overruns and mitigate the damage from overruns that occur. However, one of the costliest overruns a company can face has to do with cloud migration. In this article, we will tackle the ten most important strategies for avoiding a devastating financial blowout.

Elements of a Cloud Migration

When it comes to cloud migration, you’re really spoiled for choice. The market is fiercely competitive, which is great news for you, but picking the right vendor for cloud migration can be a difficult and potentially frustrating experience—worse yet, picking the wrong one could cost you massively in the long run. Cloudstep seeks to take the pain out of the decision-making process while simultaneously ensuring you get the best deal for your company’s specific needs.

10 Ways to Avoid a Financial Blowout

01. Have your migration plans ready

Cutting costs on cloud migration is only a reality if the cloud-based system is effective. If your new cloud-based system (or the migration itself) is plagued with issues, it can lead to exorbitant cost overruns, which is why planning your migration and performance analysis is so important—and where Cloudstep’s state-of-the art analysis comes into play, including plans to suit companies both big and small.

By tracking KPIs (Key Performance Indicators) and making note of suboptimal performance, you can track and tweak your original plan as you go.  A cloud-based system is only useful if you can maximise the tangible benefits that come with moving to a cloud-based system. As an example, you should check out Cloud Infrastructure Monitoring Software so you can ensure everything is working to your expectations.

2. Implement continuous monitoring

This one is interesting, since it might not be immediately obvious why continually monitoring the migration period could potentially affect costs. Most companies have sensitive data that they would very much like to keep private. This could be anything from trade secrets to non-public financial data. It could also be employee data and a range of other things that aren’t intended for public (or rival) consumption.

If the cloud migration is botched, say, after a security breach, a hacker could steal this sensitive data and hold the company to ransom, abuse the information for their own (or their company’s own) benefit, or simply cause chaos as an act of malice or revenge by deleting the data. A topical security risk is that of the ransomware attack, which encrypts the data until a cryptocurrency ransom is paid. If a hacker is stealthy, you might not even know your sensitive data has been compromised until it’s too late.

03. Invest in automation

Automation makes our lives easy. We let automation set our clocks and alarms, we let automated processes trade stocks as bots, and we use automation to build most of our stuff. It has allowed our economy to boom while also reducing a lot of the need for back-breaking labour.

Cloud migration is no different. There already exists a variety of excellent tools and software to help you along the journey, including AWS Migration Services, Azure Migration Tools, Corent SurPaaS, and Carbonite Migrate. You can download our eBook for a more thorough understanding of the different tools that are available to you.

04. Reduce excess storage

We usually don’t think about it much these days, but since the dawn of the computer age to the early 2000s, the compression of a given file was given a lot of importance. Software packages like StuffIt and WinZip were created 30+ years ago to tackle bloated file archives using cutting-edge compression algorithms. The MP3, which helped lay the foundation for the digital music revolution triggered by iTunes and the iPod, was a game-changer. Compression on the internet is still useful to this day. Gone are the days where you need to turn a lossless picture file into a lossy jpeg when uploading online.

However, there is still a need for maintaining good compression techniques and minimising bloat when it comes to files your company has on hand. For instance, do you really need an uncompressed hour-long 4k video clogging up your server that’s purpose is as a training or onboarding video? (For reference, that’s a stupidly high 318 GB, although it’s an admittedly extreme example.) Video is highly compressible, and the same video would probably be just as serviceable in 1080p. If you used similar compression to YouTube, the file size plummets to about 1.65GB. But even if you kept the video at 4k with the same compression technique, you’d still only have 2.7 GB. If such video content is sensitive, you could put the entire video on YouTube but with a valid email to watch it. This would save you a lot of storage space and bandwidth, especially when there is a lot of content involved.

05. Identify overprovisioning

If you’re going on holiday, you don’t pack your entire wardrobe (unless your name happens to be Mark Zuckerberg). Instead, you pack according to your destination. Simple enough, right?

If you only need 16 GB of server space, why pay for 64 GB? If your answer is “I might need it later”, consider that the price per gigabyte of storage is always going down. Have enough space to cover your overheads, sure, but don’t overprovision unless you have a good reason for doing so. Your company’s hypothetical overprovisioning might well be logical, but for many it is not.

06. Correct inefficient code

Inefficient code is problematic on a number of levels. While unorthodox (i.e., bloated) code might be okay in some esoteric instances, inefficient code in cloud migration can be disastrous.

According to APMdigest, inefficient apps are causing some companies to overspend by millions of dollars. It is estimated by the end of 22 that $330 billion will be spent on the cloud, meaning that billions of dollars are being lost as the result of inefficient code. Having your code appraised now is a small price to pay to save your money and headaches down the line.

07. Assign an inventory owner

In the Cloud Asset API in Google Cloud, access control can be configured at the project level or organization level. In this environment, you can bestow certain individuals (or a group of developers) with access to all Cloud Asset Inventory resources within a project.

08. Manage shadow IT

The term shadow IT isn’t as well known as it should be, although almost anyone who works in a company with computers in it has probably either encountered or engaged in shadow IT. It also goes by a cavalcade of other names, including embedded IT, fake IT, stealth IT, rogue IT, feral IT, or client IT. Put simply, shadow IT is when employees who aren’t with the official IT department start implementing their own workarounds. Some have even created their own software just to bypass problematic official software.

While shadow IT can have its benefits in some aspects, including innovation and reactivity, it can also pose a risk to company control, security, and reliability. It is imperative that you keep any shadow IT efforts in check, as the road to hell is often paved with good intentions.

09. Review support contracts

Cloud service agreements can lock you into contracts that won’t do you any favours. Make sure you actually have an expert read through the terms of service to ensure you’re not breaking any rules but also that your support contract will actually get you out of a bind if something goes wrong.

10. Bring your own license

Google Cloud (and other cloud services) allows you to bring your own license (BYOL). That being said, as with any BYOL agreement, do your due diligence and ensure that you have read and understood the terms of conditions. To find out more information on how to comply with these terms and how to carry out the steps in correct order, please visit Google’s support article or the supporting documentation for any cloud service you may wish to use with a BYOL agreement.

How Cloud Computing Leads to Cost Savings

There are numerous ways in which cloud computing can reduce costs. In the following five sections, we will take a look at five of the biggest points.

Requires No Setup Investments

One of the biggest pain points for any company looking to archive data—or simply process it—is the logistical hurdles and upfront costs. Server maintenance and physical storage can add up quickly. By incorporating cloud technology to solve your storage and processing concerns, much of these upfront costs are offset. This is because the cloud space is very competitive. Moreover, the largest cloud-hosting companies in the world have done a fantastic job of cutting costs through technological innovation and scaling up to nearly unfathomably large degrees. Even the biggest companies in the world have outsourced their cloud-hosting needs to pre-established cloud-hosting companies rather than use their own proprietary server farms.

Optimal Hardware Utilization

This is sort of a follow-on from the previous point. Perhaps the best idea here is to use a simple analogy. Imagine a typical office with, say, two dozen workstations. For much of the day, the computers are either operating at partial capacity or not at all. With cloud storage, data is processed and stored across various nodes for built-in redundancy—in simple terms, that means your data is backed up and always retrievable (on a competently run cloud server). So not only is this a cheaper option for most companies but also a more secure one.

Energy Savings

Server farms often get criticised for their energy use; however, what is often overlooked is how scalability actually cuts down the total amount of energy required per byte stored. Indeed, the higher demand there is for cloud computing, the more incentive that cloud-hosting companies will have to innovate and create more optimal energy-saving techniques. In any case, traditional on-site storage and data-processing techniques cannot match the efficiency per byte stored/processed.

No In-house Team

Depending on your company’s size, this could be the straw that breaks the camel’s back. By migrating to the cloud, you no longer need to keep a dedicated team devoted to maintaining server racks and other such problems that arise when you’re not harnessing the incredible utility of the cloud. Regardless of whether you have a dedicated IT team or intermittent server inspectors, your operating costs tend to become quite bloated when you’re handling everything yourself.

Eliminates Redundancies

If you’ve ever had to deal with magnetic tape backups, you know how antiquated and frustrating the experience can be. After all, storing data on tape doesn’t just feel so 20th century; it is 20th century. Moreover, a lot of companies only create backups once a day! Imagine if your company lost an entire day’s work! By migrating to the cloud, creating redundancies and backups into your system isn’t something you need to worry about. Having said that, we do encourage to keep an onsite backup of your company’s most important files (just in case).


Throughout this article, we’ve looked at all the incredible benefits that a cloud-based system can have on your business, including energy savings, cost cuts, hardware optimisation, code improvements, and taking advantage of automation; however, you don’t need to take our word for it! Just take a moment to look at the chart below from Research and Markets.

This says it all, really. In five years, the cloud market is projected to more than double. Companies have realised how much money there is to save by embracing cloud technologies. Much of this growth also stems from cloud computing. Whether you model, analyse, or plan, Cloudstep has got everything you need to streamline your cloud-migration process, making it as pain-free and as efficient as you’d like it to be.

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The role of Datacenters

The State of Play

Current Enterprise ICT Environments are a mix of various technology stacks.  Critical and second-tier systems are from different eras.  A mix of modern and legacy applications sit alongside each other.  The common challenges are security, manageability and integration of disparate parts.  There is some use of public cloud services, but most applications are hosted in on-premises or third-party datacenters.  Against this is the demand from the business for more responsive service provision, innovative use of data to solve problems and relentless downward pressure on spending.  This complexity and conflicting demands have inherent risk and ICT departments across the world are wrestling with their response.

ICT departments are attempting to reduce their exposure to technical debt, operational risk and costs.  This could be called “Getting out of IT”.  It means still delivering applications and services to the business but avoiding the necessity of owning the risk.  This can be achieved in two main ways:

  • Outsourcing.  The risk of operating the environment is handed to a third party with a series of service level agreements the business accepts.  While this works the reality is that ICT still wears the pain and risk when services fail.  Complexity is not reduced it is merely abstracted.
  • Software as a Service (SaaS).  Applications become the commodity rather than infrastructure.  A tapestry of services is purchased from software vendors and services providers.  ICT’s role is to integrate these higher-level components.  This places risk where it is most easily mitigated, with the software vendor themselves.

It is not an either-or scenario.  Generally, there is a mix of both approaches with a progressive move towards SaaS over time.

How should we deliver services?

The business currently consumes Software as a Service already.  That is how they think of it despite ICT departments having to deal with all the problems.  Applications the business uses are the top of a complex stack of services.  The key to a successful transition to lower risk and cost is to choose which parts of the stack you need to be responsible for and which should be consumed as a service.  The best place an ICT department can position itself is where it provides the maximum value to the business and its activities for the lowest cost.

The Application Delivery Stack shows, for each model where the primary responsibilities lie.  This stack can be used to evaluate delivery models for the whole environment or for individual applications.

Application Delivery Stack

DIY Model

The ICT department owns everything in the stack.  There is support from Software and hardware vendors but most responsibility for delivery lies with the ICT department

  • A large amount of effort and cost is spent in activities that do not offer value to the business. 
  • You are required to be good at everything.
  • There is little capacity to scale
  • Operations will be brittle, and the business will experience varying service levels.
  • You must orchestrate the various vertical support contracts to deliver service.

Outsource Model

The ICT department owns issues closest to the business and outsources lower layers of the stack to one or more service providers

  • ICT is responsible for application delivery.
  • A variety of providers are responsible for different parts of the stack leading to unclear responsibilities.
  • ICT still owns the burden of complexity and technical debt despite having outsourced the lower level components.

IaaS or Private Cloud Model

The ICT department owns application delivery and some platform services, but the majority of the stack is operated by a single vendor.

  • An option for hosting venerable systems where no SaaS model is available.
  • Depending on the vendor chosen more or less of the Platform Services may be viable.
  • A good combination with SaaS and to use as a steppingstone.

SaaS Model

The ICT department owns delivery of the application to the business.  ICT also owns the problem of integration between components. The effort and risks of making services available is placed with those best able to deal with it.

  • You own the problem of using the application to achieve business outcomes.
  • The application vendor provides the software in its own datacenters and owns its operational burden.
  • There is an aligned self-interest between the SaaS provider and the customer given that an outage or service interruption affects many customers.

Its pretty clear that SaaS is the way to go. So the goal should be to move towards that over time. The role of the three main delivery models (collapsing outsourcing and IaaS together) looks like this…

Market Share Over Time

What is the role of the Datacenter?

After setting the scene for the current and future direction of ICT it’s possible to put the role of a datacenter in context.  They are critical parts of an ICT landscape, but their role is evolving.

The case for Datacenters

At the bottom of the Application Delivery Stack is the Datacenter.  Whether you operate on-premises or in public cloud there is always a Datacenter.  Should a business operate its own Datacenters?  Only in limited circumstances.  Generally, a business will not be as good at datacenter operations as a dedicated third-party datacenter provider.  Levels of security, availability, power are uneconomical to provide internally.  Pooling these costs and risks reduces the costs to users.

Beyond being mere “bit barns” for servers, storage and networking the modern datacenter provider can be best considered a real estate play.  In the same way that shopping centers aggregate demand from shoppers and sell that demand to shop owners, datacenters can be thought of in the same way.  They are often not just places to house servers but marketplaces for valuable services.  The larger the datacenter, the more services available there.  It becomes convenient to connect to these services if your operations are collocated nearby.  The business model in many datacenters focuses on this market aggregation capability.  Revenue from cross-connection in datacenters is sometimes the source of profit with racking/power charges merely cost recovery.

The case against Datacenters

The case against datacenters is more a case against the sort of services they offer.  In the Application Delivery Stack there are four delivery models presented.  The best way to deliver services to the business is to leverage SaaS offerings.  In this case the role of a datacenter is limited.  They are a critical part of the service delivery model for each SaaS provider.  More often, datacenters are critical to the public cloud provider upon which the SaaS offering is built.

So this is less a case against datacenters, more an argument that you should be in a position where they no longer matter to you directly.

A career with a flammable CV

Planned Obsolescence

A baked in part of the design of technology products and an unavoidable side-effect of a career in IT

In a discussion with a colleague recently we reflected on how our careers and our CVs race ahead while the invisible fuse line of obsolescence comes along from behind and renders cherished skillsets and competencies burn away.  We have intimate knowledge of technologies nobody cares about anymore.  We were deeply familiar with products from companies now confined to a fringe article on Wikipedia.  We have programming languages on our CVs we’ll never use again, in fact when they are mentioned in a meeting we resist the urge to admit any knowledge.  The bullet points of our CVs settle over time into a thing we just call “experience”.    The fact that we have to reinvent ourselves every 5 years is exhausting but also exhilarating.  In some areas of IT that cycle is down to 12 or 18 months (Scriptaculous and Prototype, really?  All the cool kids use React, jQuery and Bootstrap now).

Few industries suffer from this planned obsolescence like IT.  Other professions are made redundant by change.  Ours has the redundancy built right in.  Through the decades, we have several careers in one.

There are two ways we can deal with this reality and only one that offers a clear path forward.

Option 1: Build a Moat (bad)

We can hunker down with our CV and resist change.  This is comfortable for a while, we end up being that heroic guru that saves the day every time.  The march of progress continues though and while we can fight change, it eventually overwhelms us.  What made us special, essential even is all of a sudden not needed anymore.  The reaction to this to build a moat around our technology or skillset.  We white-ant suggestions of anything new and act to engineer a climate of fear of change.  It’s not that the technology we work on is wrong, flawed or not in use anymore.  its just that improvements, efficiencies and lower costs can no longer be ignored.  The cost and risk of change is eventually outweighed by the benefits that can be realised.  The moat strategy comes unstuck.  This is often coupled with an unfortunate correlation between the point when you believe you are indispensable and the day you get your pink slip.  You end up being the COBOL programmer you used to consider a dinosaur.

Option 2: Be Willing to Experiment (good)

Another way of relentless change is to make it part of our career.  We should focus on the problem at hand, not the tool we use to solve it.  When we become involved and invested in a particular technology it often becomes the focus and we forget why we use it in the first place.  Load balancers and highly available database services with big arrays of web servers in the middle are great but their purpose is to deliver a website to people so they can go about their business more effectively.  It doesn’t mean that the technology and toolset isn’t important, but it is inescapable that they are a means to an end and no more.  We need to be prepared to throw away what we know and embrace something new if it’s a better solution to our problem.  If we look at what we do this way, the business will inevitably respect us for being part of the solution, not a roadblock.  None of this means that you throw everything out when something new comes along.  There is still the rule of “if it ain’t broke, don’t fix it”.  There’s a balance between keeping what works and being open to what’s new.

Observing this in the wild

Many of us in IT are consultants though.  We work in a wide range of organisations from large public companies and government agencies through to non-profits and medium sized businesses.  This broad experience across different industries with different cultures is challenging and fascinating but never dull.  What sticks out is the similarities.  We see Moat Builders and Experimenters everywhere.  In our practice we talk a lot about public cloud services in relation to traditional on-premises solutions.  This quickly flushes out the moat builders and the experimenters.  We look around meeting tables and pick who’s who based on the body language.  Crossed arms and leaning back are a good indicator.  But there are some who are open, that lean in and have open arms.  They engage with the conversation and want to learn.

In advocating for new technologies and practices it is part of our role to persuade people that this don’t represent a threat but an opportunity.  We should encourage people to try new things, to return to being out of their depths for a while in order to progress.  Ultimately the effort is well worth it.

How do we make Moat Builders into Experimenters

People’s livelihood, self respect and satisfaction comes from being useful, making a difference and feeling like they contribute to something.  There is a lot at stake so people need to feel comfortable and they need to be motivated.

  • Sell the change.  People need to buy in and for that to happen they need to be sold on the idea.  Explain to them why this new way of doing this is better than before.
  • Appeal to laziness.  Explain how it is easier than before to do the same thing.  Be careful though not to scare them into thinking that their job will be factored out.
  • Don’t call their baby ugly.  People’s skills and experience are hard won and their accomplishments should be respected.  Don’t belittle how its done now, explain how it could be better.
  • Keep going until they start convincing you.  What you’re looking for is people to start echoing back the value of what you’re telling them.  You want them to agree with you and be an advocate.

This has all happened before

Looking outside of IT we see many example of skills, professions and whole industries disappearing into history.  The industrial revolution changed the nature of work and mechanised manufacturing altered what it meant to be a craftsman.  At each point, people were freed from mundane, unfulfilling and often dangerous work.  Upheaval of this nature has consequences for individuals but society and civilisation moved on.  Whaling is no longer a sought after skill and neither is understanding X25 protocol communications.

Don’t be frightened of a changing CV, just be prepared to be up for the challenge of reinventing yourself over and over again.

Enabler in Chief

Its time for a re-think of ICT’s role in the business. We should embrace our role as enablers of great works, not the centre of the world.

I love what I do.  Lately I’ve been playing with IOT.  I know very little about electronics.  I can read the squiggles on a circuit diagram and I know what most of them mean but I don’t understand why they are arranged the way they are.  It’s like reading music, I know the notes but I can’t fathom the whole piece.  Learning these things is like unpacking a mystery and I find it immensely satisfying.  From a software perspective though I’m on less shaky ground.  But even in that realm I’ve had to revive old skills.  I have to be careful with memory again for instance.  Who’d have thought that?   The wide-eyed sensation I’m getting with this technology takes me back to 1980 when I first played with an Apple II.  The toys of my youth were blown away in that moment.  I was hooked.  Trips to the Angle Park Computing Center followed and I can proudly say that I have written code with punch cards.  Computing has been a huge part of my life for over 35 years.

I love technology but over time I realized that its really  a means to an end.  IT is or should be at the core of  every business regardless of what it does.  It’s almost never why the business exists in the first place though.  Supermarket chains for instance might have big IT teams but they’re all about the efficient marketing of bread, milk and nappies.  Banks, despite being giant information systems aren’t about IT.  Their purpose in society is to assist in the efficient allocation of capital.  This has a huge impacts on everyone’s lives.  Arguably, even software companies aren’t about IT.  The software they produce is only a tool used to solve problems in the real world.

Does this mean that a life-long passion for technology is somehow misguided?  Quite the contrary.  It’s empowering to know that IT is one of the only professions that has the potential to improve all the others.  We are merely the enabler of great works.  The trade off is that we have to let go of the expectation that our role will be understood and valued as we’d like.

I think technologists need to rethink their role with a new title:  Enabler in Chief.

How do we move from being technologists to enablers?

  • Walk a mile in their shoes. Challenge ourselves to always see things through the eyes of the business. It is our job to explain and justify our role. Often what we value will not be valued at all by those who pay for it. Explain and justify things from the perspective of the business. Shifting our perspective will improve dialog and promote respect.
  • Find a way to say yes.  The business will do it anyway.  It is better to make it easy to do things the right way rather than risk the business doing it the wrong way.  Be the enabler, not the blocker.  Our job is to help them achieve their goals.  The more we say yes, the more we will be valued.
  • The business isn’t the enemy.  I’ve lost count of how many conversations I’ve had where “users” are vilified.  When did a simple word “user” become pejorative? Words matter.  All calls to service desks start with “System X is broken and I can’t do Y”.  X is not important.  Doing Y is what is important.  Empathise with people, we’re all on the same team.
  • Learn who we work for.  There is often a demarcation between the IT world and the business.  Take time to learn what the business does and why.  In a big, complex organization this can be fascinating.  When we start to see the wider context our true value emerges.  What we see will percolate.  Suggestions for improvement will emerge and will be implemented.
  • The technology bit is usually the easiest.  Lasting, meaningful change happens gradually and painstakingly.  Respect this and understand that it is often why initiatives either fail or never get off the ground.  Usually the technology component of a solution is the easiest bit.

We should keep all of this in perspective though.  Keep true to the passion that inspired our choice of profession but respect that it is real world problems that pay for it all.