Why cloud sprawl poses a challenge for all organisations – and is costing them dearly

Few would argue that cloud services have been transformative, allowing organisations to deploy faster and flex capacity as needed. For smaller organisations, it’s allowed services to be within reach that might have been cost-prohibitive or too complicated otherwise.

But have we had too much of a good thing?

The flip side is with fewer barriers to deploying cloud services when a perceived need arises, it’s easy to try solve a problem by purchasing a new solution. And with tech savvy lines of business being targeted with products for their specialisms, it’s not just IT that is driving cloud demand.

This is particularly true for organisations trying to democratise technology within an organisation, a trend amplified in the pandemic as teams needed to adapt quickly to working remotely. As IT teams try to balance control vs enablement, a survey by Productiv found that IT departments now don’t own or manage over half of SaaS applications in a typical business.

The potential downfall therefore is cloud sprawl. Myriad systems with multiple stakeholders, and a lack of visibility on if and how the systems are used.

This can have a direct impact on an organisation’s effectiveness, profitability and security.

 

You can’t manage what you can measure

The well known saying goes “you can’t manage what you can’t measure”. Yet in a time when we are more connected with more data than ever, we are counter-intuitively sometimes less informed. We have data overload from many sources, each demanding attention.

One consequence of this is licence inefficiency.

Organisations can be affected by several issues when it comes to licensing:

  • Unused licences. A user has a product assigned as they needed it once, or just because everyone in a team gets it as standard. But do they ever use it?
  • Unassigned licences. They are sitting on the corporate account being billed, but they’ve just never been assigned to anyone.
  • Overassigned licences. Too may licences have been assigned, or there may be licences that overlap when licensing particular products.
  • Buying not reusing. Rather than looking to existing licences that could be repurposed, organisations instead, click to purchase a new one as it’s easiest.

On an individual basis this may not be of a particular concern, but when multiplied across every system, for every team, across a large organisation – that can quickly add up.

And in a busy environment with auto-renewal normally the default, it’s often too easy to just roll over into the same contract than it is to stop and take the time to understand utilisation.

That ease comes at a consequence.

 

Organisations are throwing money away on redundant licences

In separate studies, Productiv and Nexthink both found that typically over half of user licences don’t get used in organisations. That’s a stunning amount of money going to waste.

Findings by CloudZero indicate less than a third of organisations know exactly where their cloud costs are going. And Flexera says that, overall, 30% of cloud budget is being wasted.

Not surprisingly, organisations indicated that as their total spend grew so did their waste.

This is leading to dissatisfaction with the money organisations are paying. In CloudZero’s report, 49% of respondents said their cloud costs were “way too high”.

So we have organisations investing more than ever in cloud, dissatisfied with the level of spend yet potentially wasting half their licences.

The services that companies are investing in may be doing a great job. But such waste and inflation of costs risks damaging the perceived value of new technology investments and undermining the hard work that has been put into their deployment.

 

Clevr360 – bringing it all together

It’s precisely because of these challenges we developed Clevr360, a free tool that helps our customers gain a joined up real-time view of their tech estate.

Imagine being able to log in and see a view of all licence usage. To have an at a glance view of over assigned licences. To see licences that haven’t been used and could potentially be reassigned, as well as licences soon to expire. All geared around intelligent warning levels so that you can immediately see what the priority is at any given time.

That’s just one part of Clevr360: aggregating and making sense of all that intelligence that is already being generated in your organisation.

For busy IT teams it allows them to achieve a clear, unified overview of all systems and licence statuses. With this they can optimise their licence usage – and provide guidance for lines of business – and from there drive efficiency and reduce costs.

 

Lack of visibility can cost you money in terms of waste. But there are even bigger risks. In our next blog in this series, we’ll take a look at the security implications of cloud sprawl.

Keeping things compliant

While we’ve discussed the perils of too many licences, it’s also important that organisations ensure they are adequately licenced too. It may be they are over-provisioned in one area, yet under-licenced in another. This could leave organisations in the unenviable state of wasting money in one area, yet at risk of penalty in another.

The core issue is the same: lack of visibility across the cloud sprawl. 

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