Optimizing Your IT Spend as You Move to the Cloud

The move to cloud computing is gaining speed. The Flexera 2020 State of Tech Spend Report, an analysis of a recent Flexera survey of business leaders, reveals that nearly one-third of survey respondents already have workloads in the cloud. And that number is expected to jump to almost half in the next year.

The report also showed that cloud first/cloud migration is one of the top three initiatives in which companies are investing. Cloud spend has already surpassed spend for on-premises software. Also, more than 80 percent of respondents expect their organizations to increase cloud spend in the next year.

Digital transformation is driving the migration to the cloud. Enterprises in just about all industries are going digital so they can deliver more and better services to their customers, business partners and employees, and take advantage of the cloud’s potential to lower technology costs.

Cloud pros and cons

The cloud accelerates digital transformation. And it offers significant advantages over traditional data center environments, such as greater IT agility and lower costs. At the same time, gaining visibility into and control over IT spend is harder when moving to the cloud. When asked about challenges in managing IT spend, more than two-thirds of survey respondents cited understanding the cost of on-premises versus cloud.

Cloud-based applications and services are incredibly complex. They comprise many components from multiple providers and often span various technologies. Consequently, tracking spend by delivered service or by application is far more difficult in the cloud. The 2020 Flexera Tech Spend Report bears this out. As Figure 1 shows, nearly two-thirds of respondents said reporting on spend by IT business service is the top challenge they face in gaining visibility. The cloud obscures this visibility even more.

Figure 1

The cloud also exacerbates the challenge presented by shadow IT. It’s easy for employees to purchase cloud applications and services without the awareness or supervision of IT professionals. And central IT organizations have no visibility of or control over those resources.

The bottom line is that optimizing IT spend is an arduous process in cloud environments.

Tackling the challenges

Manual processes make it difficult for organizations moving to the cloud to have visibility into IT spend and manage it effectively. As Figure 2 shows, more than 80 percent of survey respondents indicate the top challenge they face in managing IT spend is the large number of manual processes.

Figure 2

Automation is essential to seeing and managing all your IT spend. IT needs solutions that deliver critical capabilities, such as:

  • Automatic discovery and identification of thousands of SaaS applications, including the identification of unauthorized software such as shadow IT apps
  • Integration with systems that maintain information about SaaS apps, their costs, their usage and their users, such as those that:
    • Contain employee credit card charges and expense report items, allowing employees to uncover occurrences of shadow IT
    • Maintain data on the applications people are using, how often the applications are used and the specific features people are using—allowing IT to uncover the overbuying of features and licenses while estimating future requirements more accurately using historical usage data
    • Keep information that helps tie resources to user identities, including job functions, departments and locations, providing insight into IT spend by department and business unit
  • Maintenance of up-to-date vendor license and contract data, including pricing models, user entitlements and renewal information, enhancing vendor management and minimizes the risk of financial penalties at audit true-up time
  • Data analysis for meaningful reporting and communication among IT, procurement, finance and other groups that deal with IT spend, resulting in effective collaboration among IT and other stakeholders leading to the more effective management of IT spend
  • Visibility into all applications and services, both on-premises and in the cloud, enabling IT to optimize spend across the entire software portfolio with a unified solution as more services move to cloud

But you can meet all these demanding requirements with Flexera’s spend optimization solutions. Flexera is the only company Gartner recognizes as a 2019 Magic Quadrant Leader in both Cloud Management Platforms and Software Asset Management Tools.

With Flexera, you can move to the cloud with confidence without losing visibility or control of IT spend.

Contact us to learn more about how Flexera can help you navigate your cloud journey.