Here at the Cognizant Microsoft Business Group, I am a cross-functional leader who both manages a team dedicated to data center migration consulting and oversees our Azure cost optimization offering. Due to the nature of these roles, I live in the intersection of cloud adoption, operations and optimization.
It may not be surprising to most that I am often the one pulled into the notorious “cloud ‘sticker shock’ meeting” shortly after a migration project begins. You may know the meeting I am referring to — the second or third Azure bill comes in, a fire alarm sounds and a mandatory all-hands meeting to correct course is scheduled. While I am no fan of this meeting, having it is the best-case scenario. If left unchecked, unplanned costs will grow and have the power to grind a multi-year migration and operation initiative to a screeching halt.
If your company has faced a similar situation, you are not alone. For the 5th year in a row, optimizing cost is the top initiative for companies in the cloud – a focus that comes in above datacenter migrations, PaaS adoption, operations expansion, and more!1 This theme of cost optimization is unsurprising for businesses that are new to the cloud. According to the 2020 State of the Cloud Report, “organizations are over budget for cloud spend by an average of 23 percent, and expect cloud spend to increase by 47 percent next year.“1
The hard-to-swallow pill is that everything in the cloud is pay-to-play. Making the right decisions early in your journey can reduce both upfront and ancillary costs. Here at the Cognizant Microsoft Business Group, we aim to help future and current cloud adopters avoid the sticker shock by getting it right from the start. This post will outline five best practices to help reduce cost waste and keep your cloud adoption on track:
- How to land the landing zone
- How to get the right people involved early
- How to modernize your people and process first
- How to avoid the tooling trap
- Choosing your partner
How to land the landing zone
Getting into the cloud swiftly with minimal business disruption is a significant undertaking. No matter how many hours your company spends researching, planning and building strategies, it will almost certainly be a bumpy road. A common pitfall during cloud migration is leaders focusing too much on short-term objectives and not enough on those that will affect operations 6-, 9-, or 12-months down the line.
The choices your company makes when creating its initial Azure environment have long-term consequences. Where successful landing zones can set your cloud journey on the right path for years to come; rushed and sloppy landing zones will lead to excessive unplanned costs.
Remember that everything has a price in the cloud — missteps in your initial architecture are a surefire way to drive up your Azure bill. Or, even worse, it could force a high-dollar remediation project years after adoption (which is a widespread trend).
When planning your landing zone, we recommend careful considerations of the following areas to avoid these long-term, costly issues.
- Plan your architecture with cost routing in mind by answering questions such as:
– Will each subscription be tied to a cost center? Each resource group? Each resource?
– How will shared resources, such as storage accounts, datalake and datafactory be charged back?
– What resource types & SKUs are permissible, and in what locations?
- Introduce Azure Policy to enforce cost routing details such as naming conventions and tagging as well as resource selection.
- Focus heavily on IAM and RBAC architecture to limit who can deploy, scale, and make changes to your cloud estate.
- Have a plan to assess and target migrated applications for modernization — to streamline costs, build “proof-of-concept” areas paid for by the business where application teams can test PaaS and SaaS solutions early in your journey.
- Adopt tooling early that supports cloud pricing structures through use of the best practices outlined in Microsoft’s Well-Architected Framework
Ideas to get started:
An industry guiding principle is to start slow, learn quickly, and expand naturally. Start with a 1-3 month “proof-of-concept” landing zone if your company can afford it. Replicate a handful of vital and non-risky workloads, and learn, learn, learn!
How to get the right people involved early
It still shocks me how often my team is asked to review cloud costs with everyone in the organization other than the finance team. The same can be said about Cloud Security and other functions.
Usually, we find that due to technical intimidation, functional leaders stray away from cloud operations, leaving the management to those “who are more tech-savvy!” Due to this, companies of all sizes wind up with a small group of technical leaders managing every cloud role instead of the subject matter experts. We can all guess the outcome of putting cloud management into a silo.
Organizations must map the right people and functional leaders to cloud operations. In their Cloud Adoption Framework, Microsoft recommends mapping people to capabilities by asking the following questions:
- What person (or group of people) will be responsible for completing technical tasks in the cloud adoption plan?
- What person will be accountable for the team’s ability to deliver technical changes?
- What person (or group of people) will be responsible for implementing protective governance mechanisms?
- What person will be accountable for defining those governance controls?
- Are there other capabilities or people that will have accountability or responsibility within the cloud adoption plan?
The Cognizant Microsoft Business Group takes this a step further and recommends mapping the right people to the appropriate functions of the cloud early. Have the finance team involved in instituting cost methodologies for the cloud and the security team involved in security frameworks. While there may be some initial technical ramp-up, getting functional leaders involved will pay dividends in the long term.
Ideas to get started:
A simple way of getting the right people engaged for most organizations is to Institute a cross-functional cloud governance board. Have representatives from all areas of the business play a part, and invite supporting vendors – Microsoft, Cognizant and more.
How to modernize your people and process first
According to Gartner, “insufficient cloud IaaS skills will delay half of enterprise IT organizations’ migration to the cloud by two years or more.”2 All too often, organizations jump headfirst into the cloud without evaluating whether their people, processes, and technology are a fit. A better way of putting this might be to say that just because something works for your company on-premises does not mean it will work in the cloud. This mindset undermines and inhibits your organization’s ability to unlock the power of the cloud. Moreover, it also can lead to long-term and high-cost mistakes.
To avoid throwing money away, we recommend that leaders evaluate their current state and plan based on the answers.
Consider questions such as:
- Does our team have the competencies and skills to operate in the cloud today?
- Is our leadership giving the appropriate resources and time for knowledge acquisition?
- Are our current processes and controls transferrable to the cloud?
- Do we have a culture of cost transparency and ownership across our business?
- Is there a plan to modernize our outdated applications and/or code once we are in Azure? Who has the competencies to support such an initiative?
- Will we consider our cloud adoption a success if we are still IaaS-focused in three years?
It’s safe to assume that many companies look to the cloud to expand their technical capabilities. Internal steering and some upfront investment might be the difference between “trial by fire” learning, which is almost always high cost, and “prepared for the worst.”
Ideas to get started:
Create a “Technical Center of Excellence” team to learn technologies that you plan to adopt. Charge them with assessment and curating skills initiatives for all groups who will manage the day-to-day operations of your cloud. To lower risk further, Gartner recommends leaders employ a cloud-native Managed Services team to oversee operations alongside your teams as you move into the cloud.2
How to avoid the tooling trap
In my line of work, I use Microsoft Cloud platform native, 3rd party, and proprietary cost management/optimization tools every day. All of which have become significantly more powerful in the past few years. With countless cloud management tools at their disposal, why is there an extreme trend of companies facing runaway cloud costs? Simply put, tools only are only one piece of the cost savings puzzle. If your organization does not have a culture of cost ownership, tools will wind up just another empty cost.
Another complex challenge we see clients face in cloud adoption: transitioning from a CapEx spending model to OpEx. When moving to the cloud, many companies stick with outdated cost ownership governance. Which usually entails having only a few leaders trained on how to analyze and manage cloud costs. Their ability to steer spending in the cloud is either too tall an order or bureaucracy blocks all progress. In a world where every single resource and service has a cost meter tied to it, you don’t get the luxury of keeping cost ownership with a select few. Instead, leaders across the business need line of sight to cost spending and authority to raise concerns and course correct.
How you use tooling is essential. The Cognizant Microsoft Business Group recommends that everyone who uses the cloud has access to cost control and tooling training. We do not recommend that companies adopt tooling in the place of an operational team that focuses on cost governance.
Ideas to get started:
Enlist an operational team responsible for creating cost reporting, budgets, and alerting in the tool of choice. Have them share and teach these controls to cost owners shortly after migration.
Choosing your partner
The cloud is a constantly running cost meter. It is no surprise that so many companies wind up with unplanned spending early in their adoption. Depending on your cloud maturity, the simple truth is that you may need to outsource some or all components of your adoption and operations to a knowledgeable entity. If your organization wants to kick-start its cloud adoption while building competency, having experts by your side may be the right move.
The Cognizant Microsoft Business Group’s Intelligent Cloud team is here to help your organization accomplish its goals in Azure responsibly. From migration planning, assessment, & execution to operational management & cost optimization, our team aims to ensure our clients make the best of their cloud investment.
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- Create an organizational culture of cost ownership
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1 2020 State of the Cloud Report, Flexera
2 4 Trends Impacting Cloud Adoption in 2020, Gartner