As organizations increase their footprint the cloud, there’s increased scrutiny on mounting cloud consumption costs, reigniting a discussion about longer-term costs.

This is not an entirely unexpected development. Here’s why:

1. Cost savings were not meant to be the primary motivation for moving to the cloud – At least not in the manner most organizations are moving to the cloud – which is to move their existing applications with little to no changes to the cloud. For most organizations, the primary motivation is the “speed to value,” aka the ability to offer business value at greater speeds by becoming more efficient in provisioning, automation, monitoring, the resilience of IT assets, etc.
2. Often the cost comparisons between cloud and on-premises are not a true apples-to-apples comparison – For example, were all on-premises support staff salaries, depreciation, data center cost per square foot, rack space, power and networking costs considered? What about troubleshooting and cost of securing these assets?
3. As these organizations achieve higher cloud operations maturity, they can realize increased cloud cost efficiency – For instance, by implementing effective auto-scaling, optimizing execution contexts by moving to dynamic consumption plans like serverless, take advantage of discounts through longer-term contracts, etc.

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In this whitepaper, we talk about the aforementioned considerations, as well as cost optimization techniques (including resource-based, usage-based and pricing-based cost optimization).