Multicloud Budgeting: Smart Distribution of Workload & Costs

By Carmen Taglienti, Principal Cloud and AI Architect
9/20/2022

A quick rundown of multicloud

When it comes to cloud environments, hybrid and multicloud are often used interchangeably despite there being important distinctions between them. Hybrid cloud environments include a mix of cloud services usually for the sake of disaster recovery, while multicloud environments deploy different cloud services to enable the use of a diverse set of capabilities. When it comes to the cloud, redundancy is a feature, not a bug: it allows organizations to protect themselves by not putting all their eggs in one basket. For example, one cloud storage service may not provide all the tools your organization needs, so you may use different enterprise cloud storage services to access the necessary tools. Though distributing cloud workloads may seem counterintuitive or complex, it can create more cohesion by unlocking the use of additional security or other vendor-specific strengths. Using multiple cloud services requires a different budgeting approach than a hybrid or on-premises one, but the extra attention can be worth the ROI.

A more effective multicloud budgeting approach

Some companies initially select a singular provider due to the simplicity of managing one service and the incentive of bulk discounts that can make the investment feel like a better bang for their buck. While selecting different cloud service providers may initially seem less than ideal due to lower bulk discounts, the benefits of expanded capabilities are meant to outweigh those incentives in the right use cases. Before pursuing a multicloud environment, make sure it is the right fit for your business goals and needs — whether it be to solve latency issues, increase resiliency/business continuity, or improve security. Once you have confirmed a multicloud environment is best suited to meet your business needs, you can now begin to assess how this environment can address these considerations:

  • Transparency: What level of transparency are you looking for in your cloud environment? What kind of monitoring and observability capabilities are available?
  • Internal vs. external management: Are you looking to manage your multicloud environments in-house, or will you need to consider the costs of managed services?
  • Security: What level of security is provided by the suite of cloud services you want to deploy, and is it sufficient?
  • Needs met: Will your development, testing, and deployment requirements be met in this multicloud environment scenario?

Why this approach works

This approach aims to ensure your multicloud environment will meet the needs of your specific business and that your budget will reflect those requirements. Using a diverse set of services enables you to equip your teams with additional tools for monitoring, security, and resiliency. Connecting your teams to the right tools can improve ROI and help your organization save more long term.

There are a couple of additional considerations when budgeting the Total Cost of Ownership (TCO) for a multicloud environment. Migrating data and applications into a new distributed system can involve significant costs that should be factored into the budget. Additionally, if you anticipate consistent expansion of your cloud usage needs then a commit plan over a pay-as-you-go model is a better option for uninterrupted and cost-effective scaling of your environment. A hybrid usage model is typically best for clients that leverage the cloud because they can select the most cost-effective plan based on their workload and consumption requirements.

Assembling the multicloud budget team roster

Now that an effective approach has been established, your organization can begin to build a budget team for decision-making. The purpose of this team is to ensure that relevant voices are heard, requirements are met, and the budget is used effectively.

Here is who should be involved:

  • Product owners: Those whose cloud infrastructure is being revised should be part of the conversation to help define requirements and capability needs.
  • Finance and/or procurement: These individuals can ensure good financial practices, such as maximizing purchase power based on realistic usage benchmarks, are followed. They should be responsible for evaluating cost and usage optimization.
  • Engineers and cloud architects: To ensure product operation needs are met, engineers should also have a seat at the table.
  • Executives: Specifically, this includes those who own the profit and loss for the business units and are looking to revise their cloud infrastructure.

FinOps: Continuous management of multicloud costs

Besides their importance to the initial budgeting and decision-making process, FinOps is critical to properly and continuously managing multicloud environment costs. The FinOps team can conduct accurate monitoring and forecasting. Their unified view of your cloud infrastructure real estate can give insights into how cost can be controlled now or in the future. This team is the solution to the ongoing management of a multicloud budget because they have the tools necessary to determine a cloud optimization strategy, handle exceptions, and realign with organizational goals as needed.

Takeaways

A multicloud environment can be a great fit for organizations looking for a diverse or flexible set of tools. However, moving to this environment involves a thorough analysis of considerations in the decision-making process. Additionally, the decision-making process should involve the necessary internal stakeholders to ensure the business's cloud infrastructure needs are being met commensurate with its TCO and ROI. Once the multicloud environment is established, a FinOps team is crucial to monitor, analyze, and adapt that environment to ongoing organizational needs.

If you’re looking for more about multicloud, here are some of our favorite resources:


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