Amid fiscal worries, IT organizations reassess cloud investments

Cloud computing had been one of the most rapidly growing technological advancements for businesses pre-COVID. With the pandemic, cloud computing and cloud-native technology became even more vital as companies shifted their operations online. However, the current economic climate is causing IT organizations to reassess their investments in cloud computing. As inflation rises, energy prices skyrocket, and predictions of a coming recession loom, many companies are beginning to tighten their belts in response.

Cloud computing is a flexible and cost-effective way to host an organization’s data and applications. However, it is not immune to cost inflation. For this reason, some IT organizations are choosing to move resources back into private data centers for cost control and predictability. Embracing this concept is known as cloud repatriation, wherein companies repatriate their data center assets to lower their costs’ risk and protect their organizational data. With in-house servers and on-premises resources, IT teams have more control over their infrastructure and can better manage operational expenses. This strategy offers an advantage over public cloud-based solutions by reducing infrastructure costs while providing security to organizations’ mission-critical systems.

On the other hand, some organizations do not want to abandon public cloud entirely, but they want to ensure they use it strategically, primarily using a multi-cloud strategy. This approach involves using different cloud providers to capture pricing competition between service providers and enhance the flexibility and resilience of IT systems. Employers, for example, have taken steps to avoid tying to any single cloud vendor’s services, which makes it easier to take their business elsewhere should they become dissatisfied with the provider or their pricing.

In either case, IT teams must manage the cost of cloud computing effectively. With the shift to more distributed computing infrastructures, new management tactics from IT teams are necessary. This need prompts major IT vendors to fulfill the demand for cloud management tools.

Park ‘N Fly, a travel services company based in Atlanta, Georgia, has moved half of its public cloud resources back into self-hosted data centers in the last year. The organization found that managing cloud costs had become too expensive, and they needed to make cuts. Conversely, Employers have taken a different approach, relying on observability tools, Ansible infrastructure for the code, and Kubernetes container orchestration for most of their multi-cloud apps, as well as VMware Cloud for VMs.

Employers’ multi-cloud deployments primarily rely on observability tools from Dynatrace, along with Ansible for infrastructure as code and Kubernetes for container orchestration for most multi-cloud applications, as well as VMware Cloud for virtual machines. This diverse set of tools allows their IT teams to monitor the entire infrastructure, plan when to allocate resources, and ensure that each application fulfills its purposes while lowering operating costs.

One thing to note is that keeping cloud costs under control requires continuous effort, but there are effective cloud cost management tools available that can help with this. For example, organizations can use CloudCheckr, a cloud management tool that provides real-time cost analysis, automated resource management and optimization, and compliance monitoring. These tools come in handy when billing is calculated down to the second and can easily spiral out of control.

VMware, fresh from a $2 billion public commitment to its R&D from Broadcom this month, has its sights set on a cross-cloud management strategy as its primary product. Cross-cloud management is the ability to oversee and maintain IT operations across disparate clouds and architectures. In response to the constant need for fresh management tactics, IT vendors such as VMware provide IT teams with more features that streamline engagement with cloud infrastructure.

To sum it up, amidst the uncertainties brought by the current economic climate, IT organizations need a focused and strategic approach to cloud investments to maximize value and reduce costs. Cloud repatriation and multi-cloud strategies offer means of reducing the cost of public cloud and providing flexibility, whereas comprehensive management tools from major IT vendors and effective cost management tools can help prevent unexpected expenditures. As businesses continue to depend on cloud storage and software solutions, the right approach to cloud computing will play an essential role in their operations.

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