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Operating in the cloud typically means that a company will spend two-thirds of its budget creating cloud solutions and one-third managing them.

With advancements in automation and analytics, the cost of managing workloads has significantly decreased. Unfortunately, this decrease has mistakenly led companies to not question 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.

When running in the cloud, companies need to change the way they procure, manage and optimize their cloud services.

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We believe they should organize their management thinking across five key areas:

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Cloud Management Platform
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Cloud Management Services
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Cloud Optimization Services
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Cloud Consumption Services
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Security Management

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 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.

Cloud Management Services

Cloud managed services are required to maintain the health of the applications and end-user services.

Cloud Optimization Services

Cloud optimization services are designed to streamline your workflows and get the best out of your processes.

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.

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.

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

For this reason, cloud optimization services become critical to maximizing application performance while minimizing potentially runaway costs.

Less than 75% of cloud services are covered by tools, so a major gap exists between the innovation and the ability to measure, monitor and manage it.

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.

Cloud Security Management

Although how data is secured in the cloud is continually changing, a core set of standard security functions need to be in place.

Cloud consumption services are the basis to properly manage cloud spend and reduce unwanted cloud sprawl.

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

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.

Putting it all together

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


One of the reasons that a cloud implementation can deliver such a high level of automation is its focus on standardization which is needed to automate and industrialize services.

Create an agile cloud operating model

Companies need to reinvent their operating model to address the challenges of software-defined infrastructure. The operating model must be able to shift the focus and structure the organization.

Transform and upskill the organization

Cloud require a completely new set of skills that are not easy to find in the market. They will need developers to write the next data ingestion, analytics algorithms, visualizations and automation.

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.

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