Kaplan is also the author of The ROI Story: A Guide for IT Leaders. The book outlines the highly nuanced financial homework that organizations should do before deciding where to run their workloads. It also includes a 10-step process for conducting a thorough total cost of ownership (TCO) assessment of monthly public cloud costs.
“If you put up a public Web server with no idea how many hits you’re going to get, it’s silly to buy your own infrastructure. That’s a good workload to put in the public cloud,” Kaplan said.
However, for workloads that are highly predictable, “on-premises approaches can be half or even a third the cost of a public cloud solution, and cost is easy to forecast and budget,” according to Kaplan.
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Moving an on-prem app to the cloud expecting to save money leaves many sorely disappointed, according to Manahan. It requires upfront preparation in order to make the app run efficiently in the cloud.
"If you can refactor an application to take advantage of what the public cloud provides, it's a great use case. But if you don’t take the time to do that and you go into public cloud, it can become very expensive, very quickly."
Indeed, multiyear cloud usage studies by companies like Nutanix and RightScale (now Flexera) consistently have shown that IT shops are substantially over budget with their public cloud services and much of their spend is going to waste. Nutanix’s 2018 Enterprise Cloud Index study of 2300 global IT professionals, for example, revealed that participating companies spent an average of 26% of their IT budgets on cloud services and that 35% of those companies were running over-budget. Only 6% stayed under budget.
Multiyear RightScale studies, including its 2019 State of the Cloud report, pegs the amount of wasted public cloud spend to be between 27% to 35%, or about a third of all enterprise cloud expenditures – a substantial and sobering number. RightScale chalks up some of that waste to resources becoming abandoned, often by shadow IT, or otherwise sitting idle while they continue to rack up monthly charges.
And the company says some is due to pricing complexity and the difficulty in determining what a cloud service is actually costing until the bill comes in. Kaplan said cloud billing can be like the healthcare system, where patients really have little or no idea what they’re “spending” until after the fact.
Kaplan added that some of the unexpected overspending has to do with limitations of public clouds. Among them are “the inability to customize your cloud solutions, the cost and complexity of pulling workloads out of the cloud, and a lack of control on the part of your IT staff, to name a few,” he said.