ParkMyCloud Reports $12.9 Billion A Year Lost on Wasted Cloud Spend

Use of the cloud has increased considerably in recent years and that trend is likely to continue as more enterprises realize the benefits that can be gained from shifting from in house resources to the cloud. The cloud means greater flexibility, improved scalability, and less expenditure on hardware and hardware maintenance. Even the physical space devoted to housing that hardware can be devoted to profit-making activities.

While there are considerable savings to be made from moving to the cloud, there is also potential for money to be wasted. Enterprises end up paying for cloud resources that are being used. What is the level that wastage? How much money is being squandered on cloud resources that are not being used? The answer is a substantial amount.

A recent analysis by ParkMyCloud puts the annual losses on cloud resources at $12.9 Billion. That’s great news for the likes of Amazon, Microsoft and Google who continue to rake in huge revenues for their cloud services, but bad news for business that have not optimized their cloud resources.

To arrive at that figure, ParkMyCloud looked at the level of spending on the cloud by enterprises. Gartner’s figures indicate worldwide IT spending will be $3.7 trillion this year – a 4.5% rise from 2017 figures. 2018 is expected to see a rise in spending on public cloud service of $45.6 billion to $305.8 billion in 2018.

One of the main drivers of growth in use of the cloud is Infrastructure-as-a-Service (IaaS). Many companies are now using the cloud to host part of their infrastructure. $45.8 billion will be spent on IaaS in 2018 according to Gartner.

ParkMyCloud calculates two thirds of that spending will go on compute resources. 44% of those compute resources are used for non-production purposes such as staging, testing, and development. However, those resources are typically only used in the day during a normal working week. Paying for the resources 24/7/365 therefore involves considerable wastage. Since those resources are usually charged by the hour, many enterprises are paying excessive amounts on their cloud resources as they also pay for idle time.

With 168 hours in a week and the resources used for only 40 hours a week, 128 hours are being paid for that are not being used. ParkMyCloud assumed a 60-hour working week, which would see 64% of instances wasted, amounting to a total annual cost of around $12.9 billion, as detailed in the infographic below:



Source: ParkMyCloud

Lights are turned off when no one is home, but the same thinking is not always applied to the cloud. Simply turning off compute (and RDS) resources when they are not needed, will see cloud costs significantly reduced. ParkMyCloud, through its cloud scheduling platform, can help businesses reduce their cloud costs by up to 65% – eliminating wastage while ensuring resources are always available when they are needed.

Author: NetSec Editor