The Latest

5 April 2022: Amazon Web Services (AWS) launched AWS Billing Conductor for customisation of Cloud cost reporting and more accurate monthly billing data. Organisations can now organise accounts into billing groups, apply specific pricing packages, assess and edit pro forma expenses and reports, and compare rates between those applied to groups and current AWS rates.

Why it’s Important

The COVID-19 pandemic has impacted 92 per cent of organisations to exceed their Cloud spend forecasts in the last 12 months, according to a recent report. As a result, many ICT groups are being asked to justify their increasing spend on Cloud services to optimise the enterprise’s purchase decisions.

Although Cloud can reduce overall costs in some areas of ICT's business as usual (BAU) expenditure (operational costs that are part of standard daily work), the increase in demand for computing and storage generally makes it appear that promised costs of savings from Cloud are not materialising. By allocating costs to specific business units’ consumption, deployment projects, use cases and new digital transformation initiatives, enterprises can identify which efforts drive the most Cloud spend. This goes a long way to clarifying why Cloud investments are worthwhile (or not, as the case may be).

Therefore, it is no longer sufficient to consider Cloud budgets as simply part of BAU, nor treated in the same way software costs have been treated in the past. These old approaches will mean that justifying Cloud spend will only ever be short-lived.

Cloud cost management tools that enable not just Cloud cost identification, but also allocation back to business benefits will be vital for identifying profitable technologies and projects within the Cloud. While there are other third party solutions in this space (such as VMWare’s CloudHealth, Cloudability and Densify), the AWS Billing Conductor will assist mid-sized organisations who cannot afford such services, or lack the skills needed to implement Cloud spend budgeting with better accuracy.

Who’s impacted

  • CMO
  • Development team leads
  • Business analysts

What’s Next?

IBRS has observed that many less mature organisations have a ‘sprawl’ of Cloud services that need to first be identified and then reined in, before cost optimisation products can be fully effective. Therefore, consider how Cloud business cases and ongoing budgets need to be communicated, and to whom, within your organisation. In addition, look into how you can set up a billing responsibility model and cost dashboard, designed for cost efficiency. Ideally, decisions around this should be made by the Cloud centre of excellence.

Related IBRS Advisory

  1. VENDORiQ: Aussie Cloud-cost Specialist GorillaStack Expands What it Watches
  2. Cloud Financial Management is Optimised with Cloud Certified Partners
  3. How to get on top of Cloud billing