What is Cloud/Software Expense Management?

By Dean Keeler, CTO and Jon Dezelsky, EVP AMI Strategies https://amistrategies.com 

The pandemic applied pressure on organizations to accelerate investments in cloud infrastructure, creating $17.6 billion in wasted cloud spend in 2020 alone. In 2022, organizations are reevaluating their decisions over the past two years and determining new strategies on how they will engage with the cloud.

The cloud environment is changing, with many organizations moving from a single, or private cloud, to a multi-cloud or hybrid approach. With this transformation comes new opportunities and challenges for organizations…especially in the realm of expense and contract management.

How Cloud Infrastructure and Offerings Have Evolved

While organizations have been using cloud infrastructure since the 1990s, over the past decade cloud services have really taken off – changing the way that organizations do business. What began in 2006, with a single public cloud environment, AWS, has grown to include numerous Cloud services providers – including major providers like Azure, GPS, business specific Clouds like Oracle and IBMCloud and vertical specific clouds like ClearDATA for healthcare. 

But whereas 10 years ago, a company might invest in one public cloud, today, adopting a multi-cloud or hybrid strategy has emerged as the way forward for many organizations. 

Organizational benefits and challenges of multi-cloud environment

Multi-cloud architecture allows organizations:

  • Optimization – Leverage the best components of a specific cloud platform for the application or workload that is being deployed.  This allows companies the ability to leverage the best features of a cloud platform to optimize ROI
  • Autonomy – Decide what is the best environment for the workloads they are deploying.  The enterprise is now in the driver’s seat and can make changes to drive savings, improve latency, improve performance, etc.  
  • Risk Management – Distributing workloads across multiple cloud platforms helps to substantially mitigate simultaneous downtime across all cloud platforms.  

While a multi-cloud approach offers significant benefits, there are some challenges that enterprises should be aware of, including:

  • Increased Management Complexity – Because there is no standardization across public cloud vendors, multiplying cloud environments means multiplying the management burden.
  • Cost Control – With multi-cloud, developers and database administrators can quickly deploy applications in their cloud environment of choice, but this can lead to unnecessary sprawl when an organization loses track of where its applications are hosted or when applications are not being run efficiently. 
  • Billing – Billing can become unwieldy with each cloud vendor using different billing systems and employing a variety of pricing, fee and infrastructure sizing models.
  • Governance and Compliance – A multi-cloud approach is one way to meet governance requirements for keeping data in the “correct locations.” However, checking the “location box” barely scratches the surface of what enterprises must do to comply with governmental regulations and/or compliance issues. 
  • Security – Although cloud vendors may tout strong security architecture and protocols, enterprises are ultimately responsible for the security of all of their data.

How Expense Management Technology (TEM) can help Manage these Challenges

Today’s leading TEM providers have expanded their expertise beyond telecom and into many other aspects of an organization’s technology spend. This includes managing the expenses and contracts for cloud architecture. In fact, today’s leading TEM providers, like temNOW from AMI Strategies, are equipped to manage many of the problems listed above. 

How does this work in the real world? 

AI-powered TEM technology can automatically upload invoices, contracts and usage data to bring multi-cloud platforms into a single pane of glass. With these insights at their fingertips, clients can easily understand their costs, find areas for savings, determine best performance and identify run-away processes, etc. 

Also, clients don’t need expertise at any one platform because the TEM system serves up the data to them. And armed with a TEM provider that’s also a cloud expert, clients can capitalize on TEM-based consulting that conducts cost modeling on workloads and can lift and shift as necessary to constantly right-size, normalize and leverage best-in class cloud services.  

Finally, with proactive policies, reporting and email alerts, the most advanced TEM systems can continuously monitor your cloud environment for vulnerabilities and security risks.

The cloud environment of today provides organizations with lots of opportunities to control and optimize their spend, but they need a trusted TEM partner to help them dial in cloud expenditures so they’re the right fit for their needs.  

Learn more about AMI Strategies:  https://amistrategies.com 

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