The What, Why, and How of Multi-Cloud Cost Management and Containment | Tech Mahindra

The What, Why, and How of Multi-Cloud Cost Management and Containment

As cloud investments continue to grow, the adoption of multi-cloud environments is becoming standard practice. In fact, the average organization today is using at least two cloud providers. Regardless of the reasons that lead a company to set up a multi-cloud environment, cloud cost control is a top-of-mind concern.

The benefits of the cloud are undeniable, but operating in a cloud environment, particularly a multi-cloud environment, begs the question: how can you efficiently manage multiple clouds when you face different pricing structures, rates, and tools for each provider? Failing to unify your multi-cloud environment into one report or dashboard makes for inefficiency and, worse yet, unforeseen and avoidable expense.

What is meant by Cloud Cost Management?

The cloud presents straightforward promises, driving adoption by promoting its high scalability and supposedly "cost-effective" structure. However, cloud adoption and maintenance can pose a substantial cost for organizations running a multi-cloud environment without an efficacious cost containment strategy.

Cloud cost management also known as cloud cost containment, help organizations gain insight into how much they're paying while evaluating their actual cloud usage parallelly. This being an ideal strategy for any company that uses a multi-cloud architecture, as this makes tracking and evaluating cloud costs extremely difficult.

With cloud cost management, you can use insights to find more effective ways to utilize cloud environments while keeping costs minimal.

Unexpected Challenges in Cloud Cost Containment

The migration and testing phases of cloud projects are often misleadingly easy to keep a handle on. However, once you're sending projects into production at scale, the associated costs are complex, sometimes charged to specific teams, and almost always a nightmare for your financial team to manage.

If you have only the native reports each provider produces, your IT team must manually navigate each tool, locate current costs, and summarize what's applicable. This is labor intensive, time-consuming, manual, and often inaccurate. The fact is, once an organization moves to a cloud environment, the days of compiling spreadsheets should be far behind them.

Mounting cloud costs often come as a shock to organizations because:

  • They have no proper cloud governance in place.
  • They have not adopted a cloud-native mindset.
  • They overlooked the risks associated with a pay-per-use model.
  • They lack visibility into their cloud usage.

Tackling each of these challenges is essential, but the last one on the list should likely be your organization's top priority. Without a unified view, cloud costs will continue to rack up even if you've done the legwork to get past the other challenges.

Why is Cloud Cost Management Important?

A survey conducted among cloud environment using companies revealed that reducing cloud costs is a top priority. According to cloud governance companies, "Most companies expected their cloud budget to increase by 10 - 25% in 2020 while considering the applications being deployed to the cloud as 'mission-critical.' That makes it critical for business success to put the budget increase to good use and not waste it on hidden and avoidable costs in their cloud organization."

To reveal the hidden costs and ensure you're budgeting in the most optimal way, you must bring transparency into your cloud management process. Opportunity is to create a unified view to automate the numbers, ensure accuracy, and quickly bring the most up-to-date information into one place for easy review. The benefits of a unified view into cloud cost management include:

  • Allocate costs to customers, allowing you to calculate cost per customer.
  • Identify and stop testing instances that were never turned off.
  • Monitor multi-cloud costs in one place and control them with ease.

With these benefits in mind, here are the best practices and major considerations your team must consider for your multi-cloud cost solution to work.

How to Create a Cost-Efficient Strategy

Identifying the need for a cost-efficient cloud strategy is easy, deciding how to create and enact that strategy is where the challenge comes in. For a cloud cost management strategy to be effective, it must control the four major factors driving cloud costs. These aspects and how to approach them are summed up as:

  • Measurement and accountability initiatives.
  • Defined cloud management process and governance.
  • A focus on cost efficiency from the ground-up.

We can break these big ideas down into smaller, more actionable items, as follows.

Collect Cost Data

Provisioning cloud resources can be difficult for some organizations, but de-provisioning the underused (and even unused) resources is often neglected altogether. Plus, if you're using a public cloud that works on a pay-per-use model, your cloud costs can easily exceed your budget.

Making use of a Cost and Usage Report (CUR) and other cost data will give you an honest view into how much you're spending on your cloud resources, allowing you to identify what can be cut back.

Consider Third-Party Services

Many cloud environments offer complementary services necessary for your developers and backend functions that can quickly add to your costs if not budgeted for or monitored closely. Monitoring will let you detect the potential to reduce costs when opportunities arise, and it can reveal the true cost you're paying for these services.

Factor in Organizational Support

Most organizations pin their developers with getting cloud environments up and running; this is a logical decision, but it is often an unappreciated process. Manually approving and provisioning requests for more cloud resources can tack on internal costs and delay projects, too. That's why offering organizational support will prove beneficial to the entire business.

Prioritize Cost Containment

It's important to budget for cloud projects, but without cost containment, you may not know that a project will go over your budget until it does. With the right cost management strategy, you'll get an over-budget warning as early as possible, allowing you to limit cloud resources for a project, allocate more funds to it, or change the timeline so you can scale accordingly.

Shutting down a cloud project because it's over budget is rarely an option, but getting a heads-up when a project is likely to go over budget is extremely helpful.

Check out our next blog on Best Practices for Your Multi-Cloud Cost Solution

About the Author
Vineeth Rajagopal author
Vineeth Rajagopal
North America Cloud CTO Tech Mahindra

Vineeth Rajagopal is the North America Cloud CTO at Tech Mahindra. Before joining TechM, he was one of the founding members & CTO of the award-winning hybrid cloud automation services company DigitalOnUs that got sold to Tech Mahindra for a $120M exit.


Vineeth Rajagopal is the North America Cloud CTO at Tech Mahindra. Before joining TechM, he was one of the founding members & CTO of the award-winning hybrid cloud automation services company DigitalOnUs that got sold to Tech Mahindra for a $120M exit.

Vineeth helped to author multiple open-source tools. In addition, he has a passion for distributed systems, workflow automation, K8’s and how they can be applied in practice to improve release engineering, infrastructure migration and multi-cloud operation.