Companies Face Increased Risk of Cloud Waste and Overspending as Adoption Hits Record High
Tangoe issues warning, offers advice as companies double down on cloud services amid COVID-19 pandemic
Tangoe, the leading expense and lifecycle management technology solutions provider for Telecom, Mobile, and Cloud, advised companies about the risk of unexpected cloud expenses as companies move more IT infrastructure to the cloud, while at the same time employees are also buying more self-service infrastructure to support working from home. In response, the technology expense management (TEM) leader offered tangible advice to help businesses better manage their cloud investment and avoid overspending amidst a challenging economic landscape.
As companies shift to remote work and move business operations online because of the spread of COVID-19, they are increasingly relying on cloud services. In fact, cloudspending hit a record $34.6 billion in the second quarter, representing a 30% bump year-over-year and 11% increase from the previous quarter. Further, IDG estimates nearly a third of IT budgets will be dedicated to cloud services by next year.
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As cloud adoption rises and enterprises seek better control over their investment, Tangoe has experienced a seven-fold year-over-year increase in demand for its cloudexpense management (CEM) solution.
“Given the cost pressures many companies find themselves under because of the current economic environment, it is critical they employ a strategy for cloud investment that provides the best service to their organizations, while optimizing both their cloud infrastructure and corresponding spend,” said Brandon Henning, Chief Product Officer at Tangoe.
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To maximize cloud investment and improve overall efficiency, Tangoe advises companies to take the following steps now:
- Achieve clear visibility into usage. An understanding of how the workforce is leveraging cloud technology plays a critical role in assessing the true ROI of these initiatives. This includes analyzing how usage has changed over time to better predict where increased or, in some cases, decreased, investment is needed. Visibility goes beyond the IT department and extends into other parts of the business, such as finance, to ensure teams are aligned on how cloud spending benefits the business overall.
- Reevaluate cloud infrastructure to optimize spend. Understanding the infrastructure purchased and how it aligns to what is required to support the business is critical for optimizing spend and cloud contracts. Organizations may be able to shift from one vendor to another, or turn-up/turn-down reserve instances to better optimize infrastructure, spend and contracts. This requires having the right tools in place to provide the necessary visibility for making these assessments.
- Establish the proper tools for cloud environment maintenance to support future investments. The modern enterprise will continue to shift to the cloud, so infrastructure requirements will only grow – and so will the associated costs of both infrastructure IT and unauthorized “shadow IT” purchases. It is critical to ensure proper monitoring tools and processes are in place for keeping cloud costs under control. By proactively identifying areas in which spending can be better controlled, organizations are able to improve efficiency and adjust budget allocations to support future investments.
“There’s no arguing that cloud is driving the way businesses operate today. The ability to expand and manage these environments will be the key differentiator in successfully future-proofing business models and avoiding potential disruptions,” Henning said.
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