Are you cutting your cloud spending? Consider sharing your billing data internally

When the budget is tight, leaders feel pressured by cost overruns, and technology teams don’t either. Many companies have invested heavily in the cloud during the pandemic and are now looking for ways to optimize resources.

According to a recent report, up to 81% of IT leaders have been instructed by the C-suite to reduce or stop cloud spending, which represents 30% of IT budgets. It’s a critical time for CIOs and other technical leaders to review their cloud and IT budgets and usage.

While abandoning cloud-first strategies in favor of on-premises or hybrid infrastructure is not recommended, cloud costs can be significantly reduced. Databricks recently reduced our total cloud spend by 25%, and we’re on track to reduce our total SaaS IT spend by 30%. We’ve accomplished this by democratizing cloud spend information: we’ve been able to bend the cost curve by providing visibility into where and how the team is spending.

Here’s the framework we used to successfully cut cloud spending, what the team learned, and how leaders can incorporate data democratization into their cloud spending strategies.

Step 1: Understand the bill

When it comes to cloud spending, the first step is to get a clear picture of what you’re paying for with a cost allocation account. This is easier said than done—accounting for a single cloud vendor is a significant task alone, so multicloud organizations understand that this step can be two or three times more complex and time-consuming. But the results are worth it: This approach—and the data you’re able to derive from it—provides three significant advantages.

Don’ts: Reducing cloud spending should be more about maximizing budgets for long-term ROI than short-term cost reductions.

First, it provides visibility into who owns each resource, what functionality it supports, and how much the team is using and spending. Second, it allows you to view your spend in different ways, such as organizing the data by service type, cloud, database, network or department, or looking at month-to-month trends to understand patterns.

Third, spending time on expense allocation allows building an infrastructure to automatically assign future expenses and understand bills on an ongoing basis.

Step 2: Use your new field of vision for discounts

Now that you have enough and reliable visibility into your cloud accounts, see where you can cut back and use vendor native tools to do this.

The goal here is to strike a balance between computational time horizons, high utilization, and reduced discounts. This method deals with economies of scale or ensures that the team is getting the most out of their equipment selection.

Next, identify the cheapest one that meets your needs. Whether it’s timing (adding in less time, like weekends) or geography (cloud providers often charge a premium for certain regions), there are many ways to do this, but there may be hidden challenges depending on your roadmap or workflow. For example, you may want to use more cost-effective regions for testing, but it’s important that your product works in the region you’re deploying to – so do so strategically.

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