The large cloud Hyperscalers have built their business on the ability to provision resources on-demand. For corporate customers, this provides the opportunity to scale as needed. The risk with this comes in when in-house IT teams do not decommission cloud resources when they are done with it, resulting in a massive bill shock.
The pattern is clear. A business sets a budget for its cloud spend, but having active services not being used over the course of several weeks can easily see a 30% spike in costs not allocated for. Invariably, this has seen more local companies embracing the move to a consumptive business model where the focus is on only paying for the resources that are used. This mitigates against the risk of organisations provisioning for resources that they do not require.
Beyond traditional MSP
Given developments of the past two years, numerous managed service providers (MSPs) have emerged in South Africa to help take care of the cloud and software-as-a-services strategies of businesses. However, the one ingredient that has often been lacking is that of cost management.
Those MSPs that will inject this offering into their value proposition will be the ones that will be most successful as we head into 2022 and beyond. The future of the cloud is very much one where companies will look at identifying more ways of only being charged for what they use.
This could be especially significant for small businesses in the country that have not yet made the transition to a cloud environment. Their concerns still mainly centre on a lack of trust and even an understanding of how to effectively use the cloud in their day-to-day operations.
Contrary to popular belief, the cloud is not necessarily right for all business applications. There are many mission-critical solutions that must be closer to users and remain on-premise. A hybrid approach will therefore become preferred where certain apps will be cloud-based while others will be hosted in the local data centre.
Of course, this will require stringent service level agreements to be put in place with MSPs to ensure that those applications are managed correctly. This creates the potential for organisations to take up the option to have baseline resources sitting idle in the cloud inexpensively and activate them in case of an emergency. Once done, they can shut those services down and resume operations as normal. It provides a more economically feasible way for especially smaller companies to start using the cloud.
But it all comes down to cost management and getting the processes in place to create more of an enabling environment for those businesses that want to go the hybrid route. Cloud computing has moved beyond simply providing computing resources for hosting applications as a utility. Today, it is a business enabler that facilitates growth, innovation, and data analysis at a scale previously unheard of. And while the temptation is there to become more reliant on these environments in a digital landscape, decision-makers must remain cognisant of putting in place the relevant cost control measures to balance adoption, resource use, and expenses.