Cost and Utilization Challenges of a Hybrid Cloud Environment

It’s been more than a decade since Amazon launched Elastic Compute Cloud and forever changed how businesses consume compute resources

Over the years, the popularity of cloud computing has continued to grow. That’s because many businesses are attracted to the promise of increased agility, faster innovation, and low startup costs that the cloud provides.

As enterprises expand to using multiple clouds, many have struggled to control costs. Effectively managing costs across multiple clouds in a hybrid IT environment has become a significant challenge—commonly resulting in unexpected charges and cost overruns.

High-tech analyst firm Moor Insights & Strategy looked into this challenge, producing a comprehensive report on how to simplify enterprise hybrid cloud cost management. I’ve summarized their findings in this article.

What causes cost overruns in a hybrid cloud environment?

Incomplete planning for actual costs seems to be at the core of the challenge organizations face. Typically, cost overruns occur for the following reasons:

  • Capacity planning didn’t allow for uncertainty
  • Cloud infrastructure utilization is lower than planned
  • Dev/test needs beyond production were not anticipated
  • Smaller costs (data transfer, load balancing, other services) were not accounted for
  • Resources are not being de-provisioned when finished using
  • Higher cost services are being used more than originally planned

Solving the cost issue

The next phase in hybrid cloud maturity must include better cost control and utilization. Having a hybrid cloud strategy will provide businesses with a more accurate forecast of expenses, yet this is only one part of the answer. The second part to achieving control over costs and utilization is through better visibility and accounting of the cloud infrastructure once it is in use.

If that goal sounds easy, don’t be deceived; it isn’t.

That’s because individual cloud providers have their own infrastructure with a toolset based on maximizing the value of their own cloud platform—not the broader hybrid cloud environment or experience that most enterprises want. These individual cloud toolsets do nothing to increase visibility and/or ease IT operations across complex, hybrid cloud environments.

In addition, individual cloud toolsets present IT operators with a continuous challenge as they try to impose some sort of accountability of infrastructure usage on developers. These monthly bills often include multiple teams with multiple cloud providers. And often, costs are only captured and categorized for each individual cloud provider.

Accountability is also often missed when using private clouds because they lack effective cost accountability. Additionally, it can take a long time to provision a VM (days to weeks), so teams are reluctant to release them back to IT. These two factors result in underutilized, stranded capacity.

What’s the answer for better hybrid cloud cost management?

To solve this challenge, businesses need easy-to-use, self-service tools that manage costs and application deployment across all public and private cloud environments. These tools should include features that not only help IT better manage the entire hybrid IT environment, but also make it easier for developers to get the resources they need to get their work done. Additionally, these tools should provide analytics that help the business better control costs and utilization.

Key elements of cloud management tools should include the following capabilities:

  • Self-service infrastructure that empowers a developer’s environment
  • Structure for tagging resources upon provisioning (with reporting capabilities)
  • API-driven, services-based SaaS platform that allows users to add existing cloud infrastructures and options for application developer use
  • Insights dashboard for visibility into cloud spend and utilization
  • Features that build cost visibility for budgeting, control, and optimization by the project owners (including drill down by cloud, project, and users)
  • Capacity and/or spend limits configurable per project (to avoid surprises)
  • SaaS-based platform to minimize setup and keep operational burdens low

Empowering developers with the tools they need

IT leaders realize that any cloud management initiative is more likely to be successful if developers are empowered instead of controlled. As I mentioned above, application developers typically lack any type of visibility and accountability into their infrastructure use. This lack of accountability contributes to both cost and utilization inefficiencies.

As developers adopt a more cloud-native structure, including architectures such as microservices, they control the iterative development and deployment of their applications. When provided with tools for visibility and control, developers can also manage the costs of their application, according to their assigned budgets.

Simplifying hybrid cloud

As enterprise cloud adoption continues to mature, organizations are developing a comprehensive strategy for managing both on- and off-premises infrastructure. Hewlett Packard Enterprise (HPE) is the only vendor with enterprise experience that is currently offering a comprehensive, software service that supports this initiative.

Moor Insights & Strategy recommends that IT leaders consider HPE OneSphere as a hybrid cloud management platform for addressing the cost and utilization challenges in a hybrid cloud environment. HPE OneSphere empowers application developers—a key constituent for success—with easy-to-use, self-service tools for cost management.

The full report, Simplify Enterprise Hybrid Cloud Cost Management with HPE OneSphere, is now available for download. More information on HPE OneSphere is available at:

About Gary Thome

Planning for the future of your business: evaluating your hybrid IT options TechNativeGary Thome is the Vice President and Chief Technologist for the Software-Defined and Cloud Group at Hewlett Packard Enterprise (HPE). Hewlett Packard Enterprise (HPE) has assembled an array of resources that are helping businesses succeed in a hybrid cloud world. Learn about HPE’s approach to developing and managing hybrid cloud by checking out the HPE OneSphere website. And to find out how HPE can help you determine an application placement strategy that meets your service level agreements, visit HPE Pointnext.

To read more articles from Gary, check out the HPE Converged Data Center Infrastructure blog.