Why Enterprises Don’t Know How Much They Spend on Cloud Services

Public cloud services continue to gain traction in enterprises, thanks in no small part to features that can improve reduce internal data center costs and improve productivity. But a new study from cloud services provider Densify has found that far too many companies are likely overspending on the public cloud. Worse yet, corporate cloud managers lack confidence in their abilities to adequately manage their cloud deployments and there’s a sense that companies are overpaying for services although they aren’t even sure how much they are paying for those services. This side show will discuss Densify’s findings in its survey of 200 “cloud infrastructure professionals” and why companies using public cloud services need to do more to ensure they’re paying the right price for the right services.

When it comes to the public cloud, companies seem more than willing to spend cash. According to the Densify data, 50 percent of organizations spend more than $300,000 per year on public cloud. One in five companies is spending more than $1.2 million per year on the service.

However, the vast majority of companies aren’t quite sure what services they are getting for their money. According to Densify, 75 percent of companies are either overspending on public cloud relative to their budget or just don’t know what they’re spending at all.

Densify’s survey found that 50 percent of companies say they are unsure whether they’re spending the right amount for the services they’re getting from cloud providers.

So, what happens when public cloud providers change pricing? According to half of respondents, they don’t know how to keep track of what Densify calls “frequent technology and pricing changes” released by cloud services companies such as Amazon Web Services and Microsoft Azure.

Worst of all, companies don’t appear to have much of a problem with overpaying for cloud services. Densify found that 50 percent of respondents are “convinced” that not knowing how much they’re spending or what value they are getting for their money is a normal condition.

Meanwhile, companies seem content with their cloud providers, despite not knowing what they are spending, what they are getting for their money, or understanding the reason for price hikes. Just 5 percent of companies told Densify that they distrust their providers.

Although many companies rely heaving on public cloud systems to drive their operations, just 30 percent of respondents said that they’re actually “well prepared” to manage cloud technologies. The rest lack “confidence” in their cloud management abilities, according to Densify.

In order to address some problems with cloud complexities, 50 percent of cloud infrastructure professionals told Densify that they could benefit from using automation to help them quickly handle the complexity of their cloud implementations.

In addition to automation, 70 percent of respondents admitted that they lack “optimization capabilities” for their cloud implementations, which could prevent them from getting the cost and efficiency benefits they looked for when they moved to the public cloud.

Audits can be useful in checking the efficiency of their cloud implementations. But according to Densify, a quarter of companies don’t audit their cloud usage or don’t know if cloud usage is being audited.