Gartner Best Practices for Cloud Cost Management

Software Asset Management has a critical role to play in the cloud according to a recent Gartner report, “Software Asset Management for the Cloud: Consumption Management and Optimization Take Center Stage”.

In the report, Gartner analysts explain that companies need to prioritize both cloud cost management and SaaS optimization as part of a holistic Software Asset Management program. Gartner notes, “Digital initiatives are fueling cloud service adoption, making their metering, management and optimization an inescapable need.”

Key Gartner cloud cost management takeaways

The Gartner report outlines 5 core processes to effectively control cloud computing costs:

  • Provisioning
  • Deprovisioning
  • Metering
  • Planning
  • Harvesting

Software Asset Management is central for cloud cost management

Software asset management discipline across all environments diagram

With the move to the cloud, many organizations assume that they don’t have to do Software Asset Management. This seems logical at first glance; after all, with a subscription model, there aren’t any compliance issues to worry about. Right?

Gartner, however, we believe, reminds us that SAM is more than just compliance, and that it’s just as important in the cloud as on-premises, perhaps even more so. Gartner explains, “SAM’s primary focus in the context of SaaS must switch from a practice of managing conventional license compliance to measuring and managing the consumption of provisioned services and functions.” Wherever software is being consumed, there’s a risk that you’re spending significantly more than you need to. Therefore, SaaS optimization sholud be a key focus for Cloud Software Asset Management.

Contain cloud costs now – or face a steep price tag later

Cloud services empower your business units and employees to make IT decisions better and faster, but ease and flexibility come with a big price tag. Increased flexibility can cause costs to spiral quickly out of control when you consume more than you’ve budgeted for, or if you haven’t right-sized your environment. But the price of unmanaged SaaS software and cloud services might be much larger than anyone initially imagined. According to Gartner research, “Through 2022 in any given month, over 30% of the growing expenditure on software and cloud services will be unused.”

Software compliance risks in the cloud

Moving to the cloud doesn’t mean moving away from compliance risks.

Even migrating to the cloud is itself a potential audit risk. Vendors may see your decision to migrate as an opportunity to get one last look under the hood and see whether they can squeeze a few more pennies out of your on-premises licenses.

Bring-your-own-license (BYOL) scenarios also carry an audit risk. While these licenses can be useful when you’re migrating to the cloud and want to keep your existing infrastructure, they also limit how you can use services in the cloud. You need to have the software license management tools and processes in place that track and manage those limitations. Doing so ensures that your BYOL cloud usage doesn’t turn into a budget disaster.

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While it’s always a good time to be compliant and to have a complete overview of your licensing situation, a planned cloud migration is a perfect opportunity for you to take another look at your environment and make sure everything is in order. This isn’t just good software audit defense practice; it will also help you in the migration process itself. Knowing what you use and what you’re likely to use, re-harvesting licenses and rightsizing your servers can ensure that you’re getting the most out of your cloud licenses.

Right-sizing PaaS and IaaS instances is critical

Gartner warns that without proper metering and management, IaaS and PaaS unused licenses can become increasingly costly. “Toxic consumption of PaaS and IaaS may occur where services continue to run incurring waste and unbudgeted costs.”

In IaaS and PaaS scenarios, it’s important to keep track of how much CPU and memory you’re using. As with a software license, use what you have, and make sure you have it set-up for your business needs. Having too many instances or making them too big can cost you significantly in the long term.

With a cloud Software Asset Management program, you can use SaaS optimization capabilities to see exactly which licenses are being used and which are shelfware. This valuable information helps organizations get the most out of their software investment.

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Gartner, Software Asset Management for the Cloud: Consumption Management and Optimization Take Center Stage, 28 November 2018, Stephen White, Ryan Stefani

This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from USU.

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