Cost optimisation with AWS - How Daemon can put an end to cloud overspend
Moving to the cloud is a great way to modernise your business, but will it save you money? There are certainly financial benefits to be gained, but this won’t happen automatically. Without the right planning, a cloud solution can end up costing more than your current set-up.
We’re big believers in the cloud, and we hate to see businesses missing out on the benefits. That’s why we offer a cost optimisation service in conjunction with Amazon Web Services (AWS). Here’s a look at how it works, and how it could save you money wherever you are on your cloud journey.
An epidemic of overspending
Businesses are scrambling to move to the cloud, but this haste is creating problems. By prioritising speed over good design and best practice, many companies have ended up paying too much for their cloud solutions:
- 57% of IT leaders admit to surpassing their annual cloud budget
- Gartner predicts that 51% of IT budgets will be dedicated to cloud services by 2025
- Research suggests that up to 30% of all cloud spending is wasted
This final point is especially worrying. With global spending on cloud services expected to reach $600 billion in 2023, a 30% inefficiency represents $180 billion in squandered resources.
It’s bad enough that companies are wasting money, but the rise in overspending is also affecting attitudes to the cloud itself. A recent study found that 72% of organisations have moved at least one application back onto physical servers. If this trend continues, millions of businesses could find themselves missing out on the benefits of cloud migration.
Why are businesses spending so much?
Before we can tackle this problem, we need to understand why so many businesses are overspending. Every company has its own baggage, but there are some common mistakes that crop up time and again:
- Businesses often over provision for their needs. They set aside space for future growth, not realising that the cloud isn’t supposed to work like this. The idea is to run lean, only provisioning for what you need now.
- Companies “lift and shift” their existing operational models to the cloud, rather than planning a new approach. This means that old inefficiencies are replicated and opportunities for improvement are missed.
- Businesses fear the loss of control that comes with moving to the cloud so they overcompensate by creating unnecessary infrastructure. This can sprawl out of control, especially if it’s not decommissioned after use.
- Businesses fail to apply cloud thinking, running services 24/7 when in fact, they should only be used on demand.
All of these mistakes have one thing in common- companies are viewing the cloud as an update of their current ways of working instead of a chance to start afresh. Cloud migration is all about cutting out the unnecessary, whether it’s excess storage space, unused applications or bloated infrastructure.
These inefficiencies can be hard to spot from the inside. Customers may not know what to look for, or they may lack the metrics to express their findings. In either case, a fresh set of eyes can prove invaluable, and this is where we can help.
No time to waste
Our cost optimisation process is designed to help you harness the true potential of the AWS cloud platform. We understand that time is of the essence, so we focus on identifying easy savings and achieving quick wins. This takes the form of a three-step process:
Engage - We start by conducting a brief interview. This helps us understand the context in which we are working and allows us to identify any initial areas for improvement.
Analyse - Next, we gather data on your cloud usage. This includes identifying the main areas of spending, including any big-ticket items that could be draining the company’s finances.
Report - Finally, we compile these findings into a three-part report. We summarise the data, set out our key recommendations and suggest a schedule for implementing these changes. This also includes an estimate of how much you could save.
Once we’ve handed in our report, the next step is up to you. We can stick around to help, or we can leave you to carry out our recommendations. Whatever you decide, you’ll be well on your way to a leaner, more efficient cloud.
Over the years, our AWS cost optimisation process has helped dozens of companies save money. Our clients have ranged from small start-ups to nationwide chains, including one of the UK’s best-known high-street retailers.
This company came to us with a single aim-to reduce its cloud spend without sacrificing performance. The company had migrated to AWS, but had simply replicated its on-premises infrastructure. On top of this, several years of over-provisioning and IT sprawl had led to a bloated and expensive system in dire need of optimisation. Enter Daemon…
These were textbook problems, so the solutions came easily. Following a short review, we suggested a number of ways the company could streamline its cloud operations. These included improving cost control and implementing more efficient resource management.
After delivering these recommendations, we stuck around to help. When all was said and done, we were able to save the company £1 million a year. Not bad for a few weeks’ work!
We’ve always got our head in the cloud
Wherever you are on your cloud journey, Daemon is here to help. From streamlining existing operations to planning a new migration from scratch, we can provide tailor-made advice and ongoing support. Talk to our team today to arrange a consultation.