In 2018, accelerated cloud migration will fuel digital transformation. How do we know? According to Forrester, the total global public cloud market will continue to grow at a 22% compound annual growth rate (CAGR), with more than 50% of global enterprises relying on at least one public cloud platform.
From talking with customers, we know this growth is driven by IT leaders leveraging the cloud to migrate applications, consolidate datacenters, and unlock business investments that enable digital transformation.
»Related content: How TBM helps MetLife take control of cloud spend, Diginomica
But cloud acceleration presents a lot of challenges, chief among them the ability to manage the total cost of ownership (TCO) in order to drive efficient, effective consumption of cloud services.
How are you managing cloud costs? You get a cloud bill, of course. (Maybe more than one.) But does that bill tell you:
- your spend and usage across multiple providers?
- your TCO, with labor, security, and software included?
- where you are wasting money, either through inefficient consumption or inefficient purchasing?
- when you are idle and underutilized, including in Reserved Instances?
- when you are about to go over budget? (Like, in 4 minutes, 39 seconds…38 seconds…)
If no, you aren’t alone. But it’s okay because you can do the math, right? You can open your bill, review hundreds of thousands of line items, and tag or re-tag them. Then you can combine those tagged line items from multiple cloud providers into a spreadsheet to get a fairly accurate picture of what cloud looks like. Last week. Because let’s be honest, that’s a lot of work.
You’ve got to speed this up. Why? It’s costing you money to do it this way, reflected in budget overruns, idle and underutilized instances, and misunderstandings about the true costs of cloud.
How MetLife manages cloud costs
MetLife, one of the world’s leading financial services companies, is a 150-year old company with a complex IT environment spread over 40 countries to serve over 100 million customers. According to Clint Boulton at CIO.com, MetLife’s computing capacity must scale as much as 25x to support increasing open enrollment traffic each year. This requires a digital strategy that embraces a hybrid environment of legacy technologies and public cloud.
» Source: MetLife renovates legacy IT for the cloud era, CIO.com
In a recent webinar, Best practices to manage growing cloud costs, MetLife’s IT team shared how they've achieved a better cloud cost management position to improve accountability and control costs. Here’s what we learned.MetLife encountered several issues as they initially managed cloud:
- Cost overruns
- No accountability for costs by app owners/business units
- A gap in the chargeback to businesses (consumption vs allocation)
- No TCO to include labor, security, and software costs
- Difficulty validating invoices that are thousands/millions of lines
- Risk of error related to a manual, spreadsheet-based process
So, how did they get multiple invoices with hundreds of thousands of line items back into a format they can use to drive accountability and control costs? (You knew this punchline was coming.) They used Apptio.
Here's how this helped: Having one gold standard system that pulls multiple cloud APIs helped MetLife achieve a daily view of costs. "Daily" is the key word, because this elimination of manual, spreadsheet-based processes that were prone to errors gave the team better, more timely access to costs. With this visibility, MetLife was able to create service offerings around cloud, with more accurate rates and allocation rules. This, in turn, helped the IT team provide daily visibility to app owners and helped justify a chargeback for the total cost of cloud.
Not only did this automation enable clarity about cloud costs internally, it helped the team fully validate invoices, providing a platform for forecasts and identifying abnormalities.
Today, the IT team reports that they feel more confident about their cloud decisions for things like:
- optimizing workloads on a daily basis
- incorporating full TCO when making migration decisions
- validating cost savings from cloud migrations, and using that data to make better decisions for future cloud migrations
Plus, the company feels more confident about IT, a trust earned with more visibility and transparency into costs. App owners and business units are empowered to control costs, and they have new levers they can use to quickly impact consumption.
» Related content: 6 principles to build a successful cloud strategy.
Lesson learned: automated cost transparency is key to managing cloud
To effectively manage your hybrid landscape, automation is key. Automating the management and optimization of cloud services (including IaaS, PaaS, and SaaS) through third-party billing integration provides the view of technology investments across on-premises, public cloud, private cloud, infrastructure, applications, business services, and projects you need to guide consumption.
Tools that address hybrid and multi-cloud management requirements pull your cloud and on-prem costs together into a unified view of spend. This ensures less time is spent gathering and organizing data, which means you can spend more time influencing good decisions.