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Underestimated complexity, unseen costs - the cloud eats away your margin
The cloud promised simplicity. No more hassle with your own servers, no endless investments in hardware, no worries about maintenance. Just scale up flexibly and pay for what you use. It sounded like a dream. As with any promise that sounds too good to be true, it usually is. So too with the cloud. The sting is in the details.
In the beginning, it seems manageable: a few workloads in the cloud and a predictable bill. But then your organization grows, new applications are added, additional services are activated. Every decision that speeds up operations makes the architecture behind the scenes more complicated. And with complexity comes additional costs. Hidden costs. Connected systems generate unexpected data traffic costs, oversized resources run on without anyone noticing, and pricing models turn out to be a maze you can't get out of.
Before you know it, you're paying for capacity you're not using, running processes that no one has approved or monitored, and taking a significant bite out of your operating margin. The cloud is then no longer a tool for working more efficiently, but a leak from which your money is draining unnecessarily.
Anyone who wants to stay in control of this needs to understand not only consumption, but also the dynamics of cloud complexity. Because the smoother everything seems to work on the front end, the more you risk losing on the back end. The question is: how do you make sure your cloud serves you instead of the other way around? Because that ... is what's happening more and more. Let's look further.
Example: How landing zones blow up complex cloud environments
All major cloud providers allow you to create landing zones. For the techies among us, a landing zone is actually an abstraction of a VLAN, with additional management and setup options. In theory, they help keep applications neatly separated and manageable.
But what if you create a separate landing zone for each application? That seems manageable for application administrators, but in practice you run the not small risk that it actually becomes a huge complexity trap.
I was recently at one of our clients in the food sector where exactly this principle had been applied in a cloud environment. At 30% of the cloud migration they were already at 110 landing zones! Consequence? The network and firewall exploded in complexity. I am not exaggerating! Those 110 zones meant 110 × 110 = 12,100 possible network paths that all had to be managed and captured in the firewalls. In addition, all that extra infrastructure just had to be billed as well. Eventually it even got so complicated that the VPN between the office location and the cloud quit, simply because it could no longer handle the network complexity. That's a moment for me where I have to deliver both bad news - the situation - but fortunately also the good news: more control over the cloud environment, fewer unnecessary resources and drastically lower costs.
Compare that to another cloud environment at a customer in the financial sector where they only set up a few landing zones per user group. There we collectively made sure that there were only a few dozen network paths instead of tens of thousands. Less complexity, less management, less cost and a much more stable environment.
Both organizations use the same cloud technology. But by being smarter about the setup, you can drastically reduce complexity - saving a lot of money and headaches.
More complexity, more resource utilization - and more cost
Complexity is a creeping danger in the cloud. At first, everything seems tightly regulated: you run a few workloads, scale up as needed and pay for what you use. The promise of the cloud!
But once your environment grows, so does the underlying infrastructure - often without anyone fully overseeing it. The fine print ...
Each additional layer of functionality, security or integration brings new dependencies. A new application must talk to other systems, increasing data traffic and storage. Automatic scaling sounds ideal, but without clear limits it can result in servers running 24/7, regardless of whether they are really needed. Logging and monitoring solutions are implemented to keep a grip, but themselves generate additional load.
What starts out as a streamlined cloud strategy can become a network of inefficiently running resources within just a few months. Unused virtual machines remain active because no one knows if they are still needed. Load balancers, once intended as a temporary solution, become permanent costs. And because everything is interconnected, the impact of one change increases exponentially.
The result? An architecture that keeps feeding itself, resulting in increasing computing power, storage and data traffic. And you'll see that reflected on your bill. The only way to avoid this is to actively manage cloud complexity and eliminate unnecessary processes before they blow up your IT costs. Because in the cloud, more complexity almost always means more consumption - and therefore more cost. And who wants that? Time to fix that!
More complexity, more management - and the costs stay with you
With that growth, the management effort also increases. More systems mean more monitoring, more maintenance and more incidents to be resolved. Backups, updates and security patches pile up. Configuration changes in one system can unintentionally cause problems in another. Without clear governance, it becomes increasingly difficult to control costs, performance and security.
Of course, you can outsource cloud management to an external party. That seems ideal. But let's face it: by doing so, you only shift the problem. The complexity remains and the costs simply shift to another item in your budget. After all, service providers charge for every hour of work, every extra layer of monitoring and every change made. Ultimately, you still end up paying the bill - and often it's higher than you expect.
Another solution is to get started yourself. Perhaps triggered by this blog, put one or two of your resources to work. “Come on people, looking for unnecessary costs, inefficient processes and unused resources!” This seems like an obvious solution. It saves hiring outside experts and thus costs. However, the downside is that the search for optimization is often done without a clear strategy, wasting time and resources without real impact. Is there another option? Yes there is. With always a positive ROI and quick results.
Grip on cost and complexity - without surprises
Managing cloud costs is more than just saving on redundant resources. The real problem lies in the complexity that builds up in your infrastructure - and how it is unwittingly costing you more and more money.
To quickly find the solution and ... we've developed two dedicated services: the Cloud Cost Audit™ and Cloud Cost Optimizer™. Both programs go beyond just identifying cost savings. We map everything out: not only where your money is leaking, but also where hidden complexity is making your IT unnecessarily expensive and inefficient. By gaining insight into how your cloud environment really works, you'll see exactly which parts you can simplify, optimize or eliminate.
Our solutions not only deliver direct cost savings, but also more control over organizations' IT strategy. That is exactly what we want to achieve and we are pleased to hear this continually from our customers.
Want to know how complexity reduction in your cloud environment can lead to significant cost savings? Schedule a no-obligation appointment and discover how to make your cloud lean & mean - without sacrificing performance and flexibility. 🚀