Cloud Sticker Shock: What to do to Optimize Cloud Spending

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A recent S&P/451 report highlighting how companies are escaping $24 billion in misapplied cloud spending outlines three techniques that will help companies streamline their cloud spending, including commitment rebates that, according to the report, offer “savings of 70% or more in exchange for making an up-front purchase or commit to a set level of monthly spending.”

This approach is best suited to “unpredictable or variable demand” workloads and cost arbitrage, a technique that “takes advantage of differences in compute pricing — either due to idle capacity at a given hyperscaler datacenter or regional variations — to dynamically tune an application. This method lends itself to long-running workloads.”

While 36% of respondents stated that they use cloud-only at on-demand rates which is by far the most expensive option, the authors of the S&P/451 survey, while outlining a solution.

The authors stated that “many companies that fail to on-demand consumption just haven’t considered how significant the savings can be or invested in the time and services to explore them. Others may feel their requirements are too ‘bursty’ to optimize. On-demand provides huge flexibility, but the reality is that most enterprises don’t necessarily need to scale up and down on a second-by-second basis. A balanced approach is to use commitment discounts for long-term baseline capacity, then supplement with on-demand as needed.”

For more information, read the original story in ZDNet.

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