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35 Percent of Cloud Spend is Wasted

The promise of the cloud is being wasted and it's costing companies big time.

Cloud management solution RightScale suggests that complexity in cloud pricing and billing is a key reason for wasted spend. A typical cloud bill, for example, can contain millions of line items that represent tens of thousands of different resource types and price points. AWS alone has more than 70,000 price points for compute instances.

So what should a budget-minded enterprise do to ensure they aren't wasting their precious cloud spend? RightScale used its RightScale Optimal platform, a solution for cloud cost management and optimization, to perform more than 60 cloud cost assessments and provides some interesting statistics to illustrate the source and causes of wasted cloud spend.

+ Forty percent of instances are sized larger than is required for the workload and could be rightsized without impacting performance of the application. Each oversized instance is wasting 50-75 percent, resulting in 11-16 percent of all cloud spend being wasted.

+ Many virtual machines in the public cloud are left running 24x7 rather than being turned off during times that they are not in use. For example, shutting down development instances that are not used at night and on weekends saves 67 percent of the spend.

+ Thirteen percent of all cloud instances are running in more expensive regions, even though the cloud provider offers a less expensive location nearby. This results in three percent of all cloud costs being wasted.

+ Cloud users neglect to delete storage that is no longer used. Virtual machines are shut down, but the storage that was attached is often left running.

"Cloud providers claim they are getting better at helping companies reduce some of their cloud spending. For example, AWS recently claimed it saved AWS users $500 million by alerting customers when they were overpaying," said Kim Weins, VP of Cloud Cost Strategy at RightScale. 

"Unfortunately, this is just a drop in the bucket. RightScale has seen that companies waste, on average, 35 percent of their cloud spend. This equates to $6.4 billion in annualized wasted cost for AWS alone. For the top three public cloud providers (Amazon Web Services, Microsoft Azure, and Google Cloud Platform), this represents annualized waste of $10 billion."
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