In the past year, there has been a significant increase in cloud spending, driven by the need for businesses to adapt to new working conditions and technological advancements. This trend shows no signs of slowing down as more organizations recognize the benefits of cloud computing for scalability, flexibility, and cost-efficiency.

Microsoft Azure has emerged as a leader in the cloud services market, providing a comprehensive suite of tools and services that cater to various business needs. Azure’s offerings are designed to optimize cloud usage, ensuring that businesses can achieve their goals while maintaining high levels of security and reliability. Its cost-effective solutions make it an attractive option for organizations looking to maximize their IT budgets.

The shift to remote work has accelerated the adoption of cloud technologies. Companies had to quickly adapt to ensure business continuity, leading to a significant increase in cloud spending. This transition has highlighted the importance of having a flexible and scalable IT infrastructure that can support remote operations and collaboration. In fact, according to the IDG Cloud Computing Survey, Cloud Computing budget is expected to be 32% of IT budget within the next 12 months. This indicates that cloud computing will continue to be a major focus for IT spending. With cloud budgets expected to account for nearly a third of total IT budgets, businesses are prioritizing investments in cloud technologies to enhance their operations and stay competitive in the digital landscape.

Cloud isn’t just for enterprise; small businesses are also realizing the benefits of cloud services and are migrating at record pace. For small businesses, Cloud services delivers agility that allows them to scale up and down as needed without having to invest into expensive physical equipment that need to be maintained. Additionally, it offers the additional layers of security that a small business otherwise would be unaffordable.

Gartner forecasts Cloud End-User Spending to grow another 18% in 20212. In fact, according to Deloitte cloud spending will be 7 times next year than overall IT spending globally. They report that “78% of CIOs ranked “migrating to the public cloud and/or expanding private cloud” as the top IT spending driver in 2020, up 20 points from a similar survey only six months earlier” 3.

If your Cloud spending is sucking dollars out of your budget, you are not alone. CFOs and CIOs who are familiar with budgeting for server hardware and software licenses are now struggling with how to best manage costs of Cloud services.

The truth is most company did not and still do not include Cloud Optimization Plan in their Cloud Strategy. That is why we build a Cloud Assessment Methodology designed from the ground up that examines Cloud environments not only based on resources but also from the lens of current business objectives and long-term planning.

Here are 7 key areas that should be incorporated in every Cloud Optimization Strategy:

  1. Replace Virtual Servers with Cloud Services
  2. Eliminate unused licenses.
  3. Consolidate cloud applications.
  4. Use automation to reduce resource usage.
  5. Implement a scheduling plan.
  6. Eliminate waste and pay only for what you need by optimizing your resources.
  7. Understand and keep up with Cloud provider’s available programs and benefits.

Many companies are not aware of how much they are overspending on cloud and the many ways they can reduce these costs.

A significant number of businesses are unaware of the extent of their cloud overspending. By implementing the strategies mentioned above, companies can identify areas of inefficiency and take steps to reduce their cloud expenses.

We have found that companies are overspending by as much as 40% for hosting in Azure. Cost-cutting measures include using automation to pay for what you need or reserving Virtual Machines rather than committing to a Pay-as-you-Go Model.

Our analysis has shown that companies can overspend by up to 40% on Azure hosting. To mitigate this, businesses should consider using automation to optimize resource usage and explore options like reserving Virtual Machines, which can offer significant cost savings compared to pay-as-you-go models.