Why a recession is great for companies with high bills for cloud computing

Finding ways to save money on cloud computing bills is beneficial in any economic climate. But it’s a particularly smart step to take during economic downturns.

The reason isn’t just that companies often need to downsize financially to stay fiscally sound during recessions. Also, when demand for cloud services declines, as it tends to do in times of recession, companies are in a better position to negotiate the best prices for those services. And once those savings are locked in, they can continue to benefit even if the economy returns to normal.

So whether you’re worried about cloud spending because you need to tighten your business’ belt to weather the current economic turmoil, or you’re just looking to seize opportunities to get even more value from your cloud for less, now is the time to pursue cloud cost optimization projects. That’s how:

Understand cloud spending

Cloud cost optimization starts with understanding how much you are currently spending in the cloud and how much that exceeds what you would spend if you were to implement cost optimizations.

This is important because the extent to which companies overspend on cloud can vary widely, as can the impact of cloud bills on the overall health of the business. In some cases, companies may only spend about 8% to 10%, which isn’t great, but which is usually not enough to pose a critical threat to the financial stability of the company. But it’s not unusual to see organizations spending over 30%. This figure places a heavy financial burden on the company and severely limits its ability to innovate, especially during economic downturns.

So measure your cloud bills today and compare them to what you’d pay if you could get discounted cloud pricing or change the way you configure and deploy workloads. While it’s impossible to know exactly how much you’re overpaying until you actually make changes that reduce your spending, you can get a general idea of ​​how serious your unnecessary spending is and how much more stable your business would be if you reduced your spending. your cloud bills so you can reallocate part of your cloud budget to other initiatives.

Evaluate cloud workloads

Cloud workloads change constantly. Those that were once mission critical may not be anymore. Or you may have invested in some types of workload configurations, such as mirroring workloads across multiple cloud regions to increase reliability, that are no longer needed because workload requirements have changed.

A recession is the best time to evaluate cloud workloads and determine whether they should be decommissioned or substantially modified to deliver savings without compromising business requirements. In other words, use the recession as an opportunity to do some “spring cleaning” in your cloud as a step towards cost optimization.

Request discounts

Restructuring workloads can save money on cloud bills. But by far, the biggest opportunity for cost savings in the cloud comes from getting discounted prices from cloud service providers.

As noted above, economic downturns create excellent conditions for companies to negotiate with cloud service providers for price discounts. When cloud providers are worried about losing business due to downsizing, they are more likely to offer bigger discounts.

The fact that the public cloud computing market has become so competitive in recent years only sweetens the opportunity companies have right now regarding cloud price discounts. Amazon Web Services no longer dominates the cloud market as it once did. The last one Gartner data shows that AWS is losing market share to competitors like Google Cloud Platform, which means AWS is more eager than ever to build customer loyalty, even if it means lowering the prices for consumers at scale of its services. Similarly, platforms like GCP are eager to gain new customers through price discounts to maintain their momentum in the cloud market.

By the way, if you think you can’t ask for price discounts because you already have a business agreement with a cloud provider that won’t expire for several years, think again. Companies can, and often do, renegotiate their agreements with cloud service providers in the medium term. Businesses shouldn’t be afraid to ask cloud service providers for better deals, especially at a time when clouds face more competitive pressure than ever.

If there’s one benefit to recessions, it’s that they offer businesses money-saving opportunities that don’t exist in boom times. Organizations have a huge opportunity to reduce cloud computing bills and, by extension, free up budgets to support other needs, and they should start capitalizing on that today by evaluating their cloud spending, evaluating cloud workloads, and then turning to to cloud service providers to ask for better pricing.

Kris Bliesner is co-founder and CEO of Cloud Automation Platform The Vegas cloud. He wrote this article for SiliconANGLE.

Image: geralt/Pixabay

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