Hitachi Application Reliability Centers

Importance of Cloud Cost Management

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  • 1.  Importance of Cloud Cost Management

    Posted 03-07-2023 08:59

    While there was a rush (and there is still some) to move to the cloud in the past 4- 5 years, we are seeing a dramatic focus on cost efficiency off late. Initially, every organization thought that moving to cloud is going to save them a lot of money (please note, we are not getting into the other benefits of elasticity and performance)

    The growth of the clous service providers in the past year was AWS – 20%, Azure – 31%, GCP – 36%!!

    There were many drivers for the migration to cloud but the pandemic and the ESG drive helped hasten the process. Many organizations used this to score some points on reducing their carbon footprint (this again, is a vast topic to discuss as moving to cloud might just shift it from the organizations to the cloud service providers)

    These were the interesting comments for the major cloud service providers, which highlights the importance of FinOps for every organization:

    "AWS – Cost-Optimization efforts continued in Q4'22 Customers are looking for new ways to save money and we spend a lot of our time trying to help them do so. As we look ahead, we expect these optimization efforts will continue to be a headwind for AWS growth in at least the next couple of quarters.

    Microsoft Azure – Business should continue to benefit from Microsoft 365 suite momentum. Though we expect continued moderation in growth rate, given the size of the installed base. Customers are making sure that they're getting most value out of it or optimizing it, and also being a bit more cautious, given the macroeconomic headwinds."

    Source – Economic times

    So, the cost optimization efforts from the likes of Azure and AWS will be a double-edged sword for them as it's going to have an impact on their growth. At the same time, not doing so will be seen as a negative. We have many tools available in the market which can bring in the efficiency required, but building a team and forming a culture is an important first step.  Many organizations have realized this and started building the teams, but it's taking time to be efficient and productive. There is a gap in knowledge on how to form the team and make them perform. FinOps foundations is one of the non-profit organizations which helps with the standards and frameworks, which can be customized by the organizations.

    This is where the FinOps consultants come into the picture and help organizations bridge the gap on knowledge vs implementation. But some of the challenges will still remain and below is the top 5 from our point of view:1. 

    1. Gathering the required information from multiple sources.
    2. Identifying the right tool(s) to make FinOps decision.
    3. Track recommended savings vs implemented savings.
    4. Support from the leadership
    5. Gamification of FinOps and related incentives.

    We will discuss more on the above challenges in our next discussion and till then, please share your thoughts on this…


    Sasikumar Ananthan
    Senior Director, Consulting Services
    Hitachi Vantara