What is Cloud Expense Management (CEM)?

Cloud Expense Management (CEM) is the process of effectively controlling any costs and resource usage related to cloud computing environments. CEM solutions offer one centralized technology platform to help companies achieve this for both their cloud software services and their cloud infrastructure services. CEM solutions are often known as the machine behind the FinOps strategy for cloud cost control.

As businesses rely more than ever on cloud services to stay competitive, they must make sure they’re getting maximum value from their investments and are staying up to date on 2024 IT Trends and Savings Recommendations. Cloud computing technologies are a powerful way to improve operational efficiency, but you also need effective cloud expense management to capitalize on the cloud, realizing your cost and productivity savings potential. Unfortunately, no one is insulated from overspending on cloud without a powerful solution; take a look at how we used our own solution to optimize our cloud costs.

Research indicates that businesses continue to invest in cloud computing. Total spending across private and public clouds is expected to surpass $1 trillion in 2024 on compound annual growth of 16%. This estimate includes spending on hardware, software and support services. As you increase your company’s investment, an effective CEM solution is needed to track where that money goes, keep costs low, and minimize any wasted cloud resources.

Learn more about Cloud Expense Management with Tangoe One Cloud.

Tangoe One Cloud is the name of Tangoe’s Cloud Expense Management platform, also accurately referred to as a Cloud Cost Management platform. It offers essential analytics, automation, and reporting so you can identify cloud waste and cost savings opportunities, getting the most value from your cloud investments. Adopting CEM software is necessary if you want a comprehensive view of your cloud services and associated spending across Infrastructure as a Service (IaaS), Software as a Service (SaaS) and Unified Communications as a Service (UCaaS).

Check out these infographics for more information on how to cut cloud costs with a CEM solution:

Infrastructure as a Service (IaaS)

IaaS is a fully outsourced cloud computing service model with managed, owned/leased hosting and development environments. It’s typically used by IT architects to support the needs of cloud software, storage, and corporate network infrastructure. IaaS includes cloud service offerings from Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform and Oracle Cloud – to name just a few. Read our full guide on IaaS Management.

Learn more about Tangoe’s Cloud Expense Management platform for IaaS.

Software as a Service (SaaS)

SaaS describes web-based, on-demand applications that are often subscription-based. SaaS applications can be consumer-facing or business-to-business.

This is often the biggest spend category for IT professionals. Many enterprises outsource their SaaS expense and asset management. SaaS applications are an area where IT departments need to be vigilant about shadow IT activity by employees. Read our full guide on SaaS Management.

Learn more about Tangoe’s Cloud Expense Management platform for SaaS.

Unified Communications as a Service (UCaaS)

UCaaS is a cloud-delivered unified communications model. It supports six functions: enterprise telephony, online conferencing or virtual meetings (A/V and web conferencing), communication-enabled business processes, instant messaging, unified messaging and mobility. UCaaS typically includes self-service web portals for provisioning, management and performance and usage reporting. Well-known examples of UCaaS include Webex by Cisco, Microsoft Teams and Zoom. Read our full guide on UCaaS Management.

Learn more about Tangoe’s Cloud Expense Management platform for UCaaS.

Having greater visibility and control over your cloud expenses contributes to financial, operational and risk benefits for your entire workforce, and Tangoe has solutions for managing your entire tech landscape. Here are some of the most common benefits of Tangoe’s CEM software, Tangoe One Cloud:

Cost Savings and Optimization

Our cloud expense management software helps companies understand and improve their usage of cloud resources and services, helping them save money. Having a greater understanding of current usage informs important decisions about where to allocate resources and how to reduce unnecessary spending.

CEM solutions not only help with internal cost optimization, but they also inform your negotiations with cloud service providers. By understanding usage patterns, you can secure better rates and pay only for the features your employees really need.

Read more about the importance of cloud cost management.

Improved Transparency and Analytics

An effective cloud expense management solution allows you to track and analyze cloud spending in real time for a clear picture of cloud costs and usage patterns. When you understand how your organization uses cloud services, you can find optimization opportunities and improve your budget and forecasting.

Stronger Security

Tangoe’s cloud expense management solution can include shadow IT discovery tools and security insights, which can help protect sensitive corporate data. CEM software also helps with regulatory or industry compliance. For example, a financial institution may have strict regulatory requirements, such as encryption or access restrictions. Automated cloud resource inventories help with compliance by providing a comprehensive list of third-party vendors accessing company information.

Fewer Errors

Automation features included in our CEM platform help you avoid much of the risk associated with human errors. These tools are integrated to automatically capture critical information and often have built-in invoice processing systems and alerting features that can flag suspicious or unexpected charges. This makes it easier to identify and correct errors that do occur.

Seamless Collaboration and Streamlined Financial Management

Managing expenses is often a collaborative process involving multiple departments. But people are busy, and tracking expenses is more difficult when you have many providers, services and office locations and departments. The resulting outcome can create manual work with little standardization across the business, which can mean inefficiencies and frustration. New research shows that there are key reasons companies struggle with capitalizing on their cloud investments.

Cloud expense management systems can help you streamline recordkeeping, review and approval processes, and communication, making it more efficient and effective. For example, automated cloud invoice processing and contract management streamlines work and gets approvals done quickly with a centralized system for standardization. There’s no need to be slowed down by inefficient spreadsheets, inaccurate expense reports or redundant approval layers.

Cloud Optimization is a function of an enterprise cloud expense management solution that helps identify opportunities to reduce costs, resources and time associated with managing cloud services and maintaining IaaS, SaaS and UCaaS to maximize the value of these investments.

Cloud Optimization enables organizations to budget accordingly, scale, right-size and forecast future needs, maximizing the value of their investments across their entire cloud portfolio. With the mounting cloud costs across spend categories, savings enable IT leaders to reinvest in transformative initiatives that drive competitive advantage.

Learn more with the 5 steps for cloud cost optimization as recommended by ZK Research.

Tangoe’s CEM solution uses the FinOps framework to operationalize cloud cost control across public, hybrid, and private cloud environments. Here is a short summary of some of the most popular features and functions in the Tangoe One Cloud platform that enable IaaS and SaaS cost optimization:

  • Inventory Management
  • Cloud Visibility and Usage Analytics
  • AI-Powered Savings Recommendations
  • Unused Resource Identification
  • SaaS-Only Capabilities
    • Shadow IT Discovery
    • License Management
    • Security Insights
  • IaaS-Only Capabilities
    • Reserved Instance Management
    • IaaS Tagging & Pausing Guidance
    • Cost-Effective IaaS Configurations
    • When to Use Discounts

Learn more about Tangoe One Cloud for IaaS

Learn more about Tangoe One Cloud for SaaS

FinOps is a recognized process and framework for managing cloud costs, which helps explain why FinOps and cloud expense management are so closely 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 expense management shares in all the same goals and is a solution for companies looking to speed the success of their FinOps programs.

Thus, many FinOps practitioners use CEM software and services to help them gain visibility and control over their IaaS and SaaS spending. 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.

Learn more about FinOps with these resources: