According to the filings for its Initial Public Offering (IPO), the ride-sharing company Lyft will pay at least $300 million for cloud services to Amazon Web Services (AWS) by the end of 2021. This giant figure breaks down to between $8.33 million and $8.57 million every month. Notably, even if Lyft doesn’t consume that much in services by the end of 2021, they will still have to pay the difference.
Lyft likely agreed to the AWS contract for cloud services to ensure access to ample computing resources, so that infrastructure problems wouldn’t cut into their potential growth. It’s a smart move and shows that they understand their business and its resource demands.
But the filings reveal an unacknowledged truth about cloud computing: it’s not as inexpensive as some might think. Even though the cloud can lower your initial investment in computing resources and personnel, it still represents a significant piece of your total budget over time – and those costs can quickly balloon without proper SaaS optimization and cloud cost management.
Cloud cost management is more than counting software licenses: it’s the oversight to monitor, report and forecast your business needs so that you’re not locked into expensive, long-term contracts and can achieve cloud cost optimization.
Transitioning from one cloud provider to another, or even from the cloud back to an on-premises environment, can be a costly barrier for exiting an expensive or unsatisfactory cloud contract. If your company decides to make a move, you will need the resources to migrate the data effectively, perhaps requiring an intermediary solution both to store the data and to manipulate the data if it’s in a format that’s incompatible with the new environment.
Learn how to minimize Cloud Shock – the unexpected, unbudgeted cost increase from delivering IT services via public cloud. Read the latest research from The ITAM Review.
Here’s where cloud software asset management steps in. It is essential to be able to measure your current usage, optimize your current licenses, and forecast future needs. SaaS optimization software is a big driver to achieve these deliverables.
And these are the insights that give current and potential investors security in knowing that your investments are guided by sound and strategic license management insights.
So, before your company enters into a massive and potentially costly cloud solutions contract, make sure that you:
Once you’ve done all the above, you’ll be ready to negotiate a cloud services contract that meets your company’s specialized needs and goals.
Just because the cloud isn’t as affordable as it once seemed doesn’t mean that cost-effective cloud licensing is out of reach. Now more than ever, it’s important for you to take control of your cloud environment before it takes control of you.