80% of all enterprise workloads will be in the cloud by 2025, according to Oracle. Enterprise organizations are increasingly establishing hybrid IT models to maximize their existing in-house equipment while using the cloud to stay more agile and innovative. The cloud is often categorized as less expensive; however, it also can “overtax resources and impact existing governance, risk, compliance, and cost strategies.” Let’s take a look at some of the positive and negative implications of hybrid IT for enterprise organizations.
Effects of hybrid IT on operational overhead
Cloud models typically add a layer of agility to existing on-premise server operations. The chief benefit of cloud computing has always been scalability achieved by increasing computing infrastructure without adding physical overhead.
Public cloud platforms can be less expensive than on-premise infrastructures or private cloud models. Hybrid models initially appeared to reduce costs for enterprise organizations by cutting out the need for additional equipment and staffing overhead. In hybrid models, scaling up no longer necessitates the purchase of additional servers or other equipment.
Pricing models for public cloud usage changes, however. So companies must keep a watchful eye on these resources and the respective budget allocation to avoid unnecessary or unexpected overspending. “For the enterprise, managing cloud costs has become a huge problem,” according to a recent report from CloudTech.
When crafting hybrid architecture, companies must map not only the infrastructure benefits, but the financial gains they hope to achieve as well. Setting these metrics will help companies spot hybrid IT red flags before they drag the IT budget into the red.
Financial red flags for your hybrid IT model
“The replacement of well-understood, static data center resources with consumption-based and on-demand cloud resources can disrupt both compliance and cost management operations.” — Hewlett Packard Enterprise (HPE)
Utilizing cloud models is significantly different from traditional on-premise operations. These differences go beyond software or network engineering and data management. Hybrid architectures require a different type of operational and fiscal oversight to drive consistent best practices and keep costs under control.
Enterprise organizations typically lack the experience to manage these dynamic frameworks, resulting in fragmented decision-making and cost overruns. Without a centralized governance team, cost management best practices can go awry. HPE suggests there are big challenges to fiscal management of these cloud models, including:
- Typically, no single point of decision making for managing hybrid environments.
- Compliance management that requires a different process in hybrid frameworks.
- Massive amounts of financial data that make understanding good vs. bad cloud spending problematic.
These challenges can easily extend a hybrid IT budget beyond the traditional operating costs of on-premise architecture. The key is to develop oversight for today’s models to optimize cloud spend.
Building oversight for your hybrid IT infrastructure
Enterprise organizations adopting hybrid cloud models must establish and practice cost management strategies to control spending. Although the benefits of cloud computing are obvious, without proper controls, unexpected budget spikes can be problematic. To develop a cost-containment strategy, enterprise organizations must:
- Review the cloud provider’s billing models and compare the volume of CPU or data run-time your applications require. Then, compare those estimations against how much it would cost to run on your existing infrastructure.
- Plan deployments to deter additional costs. What are the fees associated with access, CPU, and storage? Establish a way to track spending across the entire infrastructure.
- Evaluate for waste and budget overruns in multi-cloud spending. Track resources by geography, user, and ownership, as well as setting up cost centers and detailed billing reports to avoid overspend.
- Set up governance that blocks shadow IT spending.
- Consider a cloud cost management audit from an external resource.
Windsor Group specializes in evaluating, prioritizing, and selecting managed service solutions to advance your IT speed and agility. We design and evaluate Hybrid IT managed service solutions based on your culture, technical, and financial goals.
To ensure your hybrid IT infrastructure is configured in ways that truly reduce overhead, call on our team.