GUIDES

What is Cloud Cost Management?

Cloud Cost Management (CCM) is a strategic and tactical approach to using cloud technologies and computing resources more efficiently and cost-effectively. As companies digitally transform, making more investments in cloud, a well-defined Cloud Cost Management program helps control costs, optimize the utilization of infrastructure and software, improve budgeting and forecasting, and align investments with business goals – improving overall financial health for sustainable cloud innovation.

Companies move to the cloud for many reasons: flexibility, scalability, security and, of course, cost cutting. Potential cost savings is a powerful motivator for making the leap, but business leaders often find themselves unprepared for the actual costs and rising expenses related to their cloud technologies and cloud computing resources. Companies are now using dozens – even hundreds — of different cloud services. How do you govern cloud costs at all levels of your organization? How do you curb waste, properly allocate costs, and prevent overspending?

This is where Cloud Cost Management comes into play.

There are many Cloud Cost Management software tools and managed services available, but a Cloud Expense Management (CEM) solution like Tangoe One Cloud is top-rated for its ability to centralize cost management for both cloud software and cloud infrastructure services across a vast list of cloud service providers and application services. CEM solutions are touted as the machine behind the FinOps strategy for cloud cost optimization and can reduce cloud costs by as much as 40% when implemented effectively.

The cloud comes with many advantages, as well as a unique set of challenges for IT and financial teams trying to track investments and usage, compare prices, and allocate cloud expenditures across multiple departments within the business. Sprawling cloud technologies blur visibility and transparency into invoices and service usage data making it hard to stay on top of spending and consumption trends.

All of this creates problems with:

Runaway Costs: You need protective parameters in place to avoid overprovisioning (deploying and paying for cloud resources that go unused) and thus overspending. Today, it’s not uncommon for companies to overspend in the cloud by as much as 70%, according to Gartner.

Trouble Seeing and Finding Cloud Waste: 30% of cloud resources go to waste, and you need deep clarity into your entire cloud estate to identify unused or misused resources including

Acting on Cost Savings Opportunities: To cut costs and maximize value, you need access to – and the ability to quickly act on – cost savings intelligence. For example, knowing where needs and services are mismatched so you can start scaling or rightsizing across IaaS, SaaS, and UCaaS. This should include the right team to reallocate wasted resources, handle invoice corrections, manage vendor disputes, and modify services as needed.

Holding Departments Responsible for Cloud Costs: With the cloud consuming such a huge part of IT spending, companies need to carefully account for applications and infrastructure to protect their bottom line. It can be extremely difficult to know where resources are being used across the organization, plus keep teams accountable for their usage in the form of issuing chargebacks.

Aligning Cross-Functional Teams to Prioritize Cost Optimization: A crucial yet oft overlooked part of Cloud Cost Management involves the overlapping needs and dependencies among IT, finance, and other stakeholder teams. Cloud cost governance is an organization-wide initiative and needs to pull everyone across the entire cost management ecosystem together for comprehensive success.

Cloud Cost Management, as part of a Cloud Expense Management platform, provides IT and financial teams with a definitive understanding of their organization’s entire cloud estate to make better decisions around cost allocation, unnecessary spending, budgeting and forecasting, and much more.

Learn more about calming the chaos of cloud costs.

FinOps is a recognized process and framework for cloud cost management. In fact, FinOps and cloud cost management are so tightly related that some consider them one in the same. FinOps helps IT departments and financial teams join together with the aim of gaining more financial control and predictability over corporate IaaS and SaaS expenses. It’s also considered a cultural practice that helps stakeholders take ownership and accountability for cloud spending, putting best practices into place for visibility and cost governance. Cloud cost management shares in all the same goals.

Learn more about FinOps with these resources:

Tangoe One Cloud is a Cloud Expense Management platform that fuels FinOps practices by simplifying, managing, and optimizing cloud spend in a single platform designed to address IaaS, SaaS, and UCaaS cloud environments collectively. Here’s how our cloud cost management solution sets the bar:

Wide Cloud Visibility

Tangoe One Cloud clears the haze of even the most complex cloud environments and delivers actionable insight into all IaaS, SaaS, and UCaaS expenses. Know where your money is going, which resources drive costs, and which teams or users spend what. Our solution leaves no stone unturned.

  • Tangoe One Cloud works with today’s major cloud service providers (CSPs) to provide a hybrid cloud cost management solution. Tangoe One Cloud works with Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform (GCP), Oracle Cloud Infrastructure, and VMware Private Cloud.
  • When it comes to SaaS, Tangoe One Cloud takes what competing solutions do and doubles it. Our platform supports twice as many direct SaaS integrations (550+ apps) and is compatible with +225K other SaaS and custom apps.
  • Immediately uncover all the sanctioned and unsanctioned apps in use across your organization. With Tangoe, you get multi-source Shadow IT discovery, including a five-step Smart App Discovery process for wider intelligence gathering.
  • No one comes close to Tangoe’s Microsoft 365 user analytics. See how licenses are assigned and not assigned to reduce unused resources, make data-driven decisions about how many licenses are really needed at each E3 and E5 tier, and forecast needs based on accurate usage and spending.
  • Unlike many other CEM platforms, Tangoe One Cloud integrates with financial platforms like Accounts Payable (AP) and General Ledger (GL) software to customize and further streamline overall financial management.

 

This level of visibility and functionality is vital for maximizing optimization opportunities, eliminating wasted resources, setting proper budgets (and sticking to them), accurately allocating cloud costs, setting parameters that prevent cost overruns, and so much more.

 

AI Automation for Smarter FinOps Programs

Artificial Intelligence is what makes Tangoe One Cloud a cloud cost management juggernaut. Our AI-infused platform drives more savings and process efficiencies compared to competing solutions and doubles cost savings compared to a Do-it-Yourself (DIY) FinOps approach. Using the power of AI, companies can:

  • Closely monitor constantly changing service prices and keep tabs on newly released capabilities that can help make cloud consumption more cost efficient.
  • Compare current usage data and infrastructure configurations with millions of cost-optimized pricing schemas to ensure their cloud estate is as cost optimized as possible.
  • Automatically alert teams of cost threshold violations to prevent expenses before they’re charged.
  • Get AI-powered recommendations for cloud cost savings that only get smarter as our AI engine continually ingests and assesses IaaS and SaaS resource usage data.
  • Immediately start turning potential savings into dollars saved with hyper-automation. Our AI engine will act on its own cost–savings recommendations – all you must do is push an approval button.
  • Apply automation across the entire Cloud Cost Management ecosystem, from invoice processing to bill pay to contract management.

 

Flexible Analytics and Reporting for IT and Finance Teams

Adapting your digital strategy to ever-changing landscapes requires regular analysis and right-time, right-information decisions. With automatic data analysis and a unified view of cloud expenses and inventory, Tangoe One empowers companies to proactively problem solve, mitigate risk, track savings, and right-size spend.

  • Monitor cost and usage, including spikes and dips, to scale as needed and proactively identify potential issues. Make accurate projections based on trends and other critical insights gleaned from data.
  • View your information the way you want. Get a top-down view of enterprise-wide expenses across multiple providers or zoom into the details using built-in filters. View spending trends by service area, vendor, and charge type to understand your assets and their financial impact.

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  1. Obstructed view of usage and costs: 70% of IT and financial decision-makers say it’s hard to account for cloud usage and spend. If you don’t know who’s using what or how much you’re spending, it’s time to tighten the reins with Cloud Cost Management.
  1. Stakeholders lack the insight they need to drive impact: It’s not just about knowing your current state of usage and spend. You need to continually optimize your cloud usage and rates to achieve better price performance and higher cloud ROI.
  1. Cloud investments aren’t meeting expectations: Less than half of UCaaS and IaaS investments have fully delivered anticipated benefits. Can you relate?
  1. You lack the organizational alignment needed to make FinOps a sustainable practice: Overshadowed by siloes? Empower your IT team and financial team to manage cloud utilization and cloud finances together using a central control center.

Do Cloud Cost Management better with Tangoe One Cloud. Learn more about our FinOps solution for Cloud Cost Management.