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Operating in the cloud typically means that a company will spend over two-thirds of its budget creating cloud solutions and roughly one-third managing them. With advancements in automation and analytics, the cost of managing workloads (and particularly those in the cloud) has significantly decreased.

Unfortunately, this decrease has mistakenly led companies to not question adequately enough how much they are spending in the cloud. In some cases, ignoring this factor causes companies to spend more in the cloud than they previously were, with obvious negative repercussions for the overall business.

By “running different” and combining cloud managed services, optimization capabilities and consumption management, organizations can drive an improved business case across their infrastructure by reducing the cost of managing the environment and of the estate itself while unleashing the full business potential of the cloud.

When running in the cloud, companies need to change the way they procure, manage and optimize their cloud services. We believe they should organize their management thinking across five key areas:

cloud-managed-services
Cloud Management Services
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Cloud Optimization Services
cloud-consumption-services
Cloud Consumption Services
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Cloud
Security Management
cloud-management-platform
Cloud Management Platform

Cloud Management Services

Cloud managed services are required to maintain the health of the applications and end-user services that leverage the cloud, and to support changes within that environment on an ongoing basis.

One of the key success factors of cloud managed services is a cloud operating model. This operating model must be able to handle the challenges of the new world of cloud and provide agility, ease of use, unencumbered scalability and full independence of how the infrastructure is used. It must also simultaneously handle more traditional applications that want control of the estate, predictability of performance, and stability of the environment.

Most large enterprises have complex application portfolios with hundreds or thousands of applications.

So, even as they move more of their applications to Agile and cloud-native development, they will still have many legacy applications to support. In fact, as digital decoupling and microservices gain traction, many applications will have components that live in both worlds. For this reason, the cloud operating model must simultaneously support multi-cloud and legacy environments while enabling multi-speed delivery.

Cloud Optimization Services

Cloud managed services are required to maintain the health of the applications and end-user services that leverage the cloud, and to support changes within that environment on an ongoing basis.

For this reason, cloud optimization services become critical to maximizing application performance while minimizing potentially runaway costs. We find that many enterprises use the cloud inappropriately, buy the cloud incorrectly, or both.

Less than 75% of cloud services are covered by tools, so a major gap exists between the innovation released from the public cloud providers and the ability to measure, monitor and manage it (let alone optimize it). Without the right modelling tools, methodologies to optimize, and knowledge of the latest innovations, IT organizations risk spending more than is necessary across their existing cloud estate.

Without the right modelling tools, methodologies to optimize, and knowledge of the latest innovations, IT organizations risk spending more than is necessary across their existing cloud estate.

Cloud Consumption Services

Every month, companies receive a bill from their public cloud provider(s) and, over time, this bill grows both in size and complexity.

In some cases, we have seen invoices reach hundreds of thousands of individual line items. Companies must be prepared to effectively manage and reconcile this complexity on a regular

basis to properly manage cloud spend and reduce unwanted cloud sprawl. They must manage their consumption of IT services much differently

Managing cloud consumption

Buying Strategy

Buy in an ongoing basis

Determining when and how to buy cloud assets for the lifecycle of an application is an ongoing activity.

  • Reserved capacity purchase planning
  • Failsafe reserved instance allocation
  • Spot-first workload strategies
Discount Services

Manage discounts and credits

Coordinate application of discounts (sometimes tiered) and related credits back to relevant business users.

  • Clearing house for credits
  • Cloud invoice management
  • Discrepancy resolution and payment
Billing Services

Manage complex bills

Ongoing and short term purchases drive complex bills that need to be tracked and vetted.

  • Department cloud usage charge-back
  • Internal/external pricing structures
  • Show-back & charge-back analysis
  • Enriched savings

A monthly bill of $250,000 may have up to 85,000 individual line items, and a company’s reconciliation processes must be able to map credits back to the correct budgets and projects.

Cloud Security Management

Although how data is secured in the cloud is continually changing as cloud provider capabilities evolve, a core set of standard security functions need to be in place and managed in every cloud environment.

Deployment of advanced security services needs to be considered based on data classification and regulatory requirements. Opportunities to optimize the cost of providing these security services through cloud provider native capabilities should continually be evaluated.

It is essential that the new operating model and managed cloud provider adhere to regulatory and compliance requirements and augment security controls with cloud-native capabilities.

Cloud Management Platform

To enable cloud management, we advise organizations to no longer think in terms of “tools” that manage a set of given infrastructure but rather in terms of a “platform” that manages a hybrid set of cloud components.

A cloud management platform should deliver on three primary capabilities:

It must operate across a complex, multi and hybrid cloud estate that includes legacy and private cloud environments, along with multiple public clouds. Having a single control plane across the entire estate is critical for auditing the journey to the cloud and maximizing its effectiveness.

For cloud optimization, the cloud management platform must deliver on usage data, cloud tagging, monitoring of new services, and predictive analytics, to name just a few functions. To support cloud spend management, the cloud management platform must provide billing analytics, cloud credit optimization, price simulation and market comparison data.

The platform needs to evolve over time. As public cloud providers evolve and bring innovation to the market, a cloud management platform must be able to embed this innovation on an ongoing basis or, at minimum, not hinder or limit its use by developers.

Putting it all together

To continuously optimize the management of your cloud environment, look to focus on four sets of activities:

Standardize

One of the reasons that a public cloud implementation can deliver such a high level of automation is because of its focus on standardization. The standardization of the service catalogue is needed to automate and industrialize services. Thus, it is important to bring this same level of standardization when building a private cloud. With a well-defined set of service options for computing, storage, and networking, companies can effectively automate and operate a private cloud to behave similarly to a public one.

Create an agile cloud operating model

Companies need to rethink and reinvent their operating model to address the challenges of Agile, cloud, and software-defined infrastructure. The operating model must be able to:

  • Shift the focus and structure the organization around
  • Address multi-speed
  • Provide governance across the business, technology and operations

Transform and upskill the organization

Cloud and Agile both require a completely new set of skills that are not easy to find in the market. For example, operators of the future will no longer be “eyes on glass.”

They will be developers writing the next data ingestion, analytics algorithms, visualizations and automation. It is critical to develop comprehensive programs to re-skill your workforce to operate in Agile and cloud.

Use hyper-automation platforms and tools

Platforms and tools are at the heart of cloud. To meet the growing demands of the business, an IT organization cannot scale simply by throwing people at the problem.

That approach is difficult to execute and will not provide a path to operational efficiency. Instead, companies should tap into the power of applied intelligence using analytics, automation and AI to improve and optimize how they operate.

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