As a driver of digital transformation, the cloud is growing at a staggering rate of 21% per year through 2021, according to IDC. The global SaaS market, including access to applications, is helping to drive this growth. However, the low level of detail in the billing of cloud services, such as Microsoft Azure or AWS, is not sufficient for large companies seeking to charge back consumption to their business units.
The cloud offers work on a recurring flat rate model, to which must be added the communication costs of the various add-ons linked. If not measured and analyzed, these variable costs can get out of control. Faced with the growth of cloud solutions, a lot of attention must be paid to identifying savings opportunities. Keeping control of cloud spending requires rigor, a suitable tool to capture data and fine analysis.
Lucernys has become a Finops player on the cloud side by applying a methodology that was implemented 20 years ago in the telecom industry. Lucernys has taken this step to accompany its customers in their digital transformation. We present a feedback from a Lucernys customer from the retail world who made the switch to the hybrid cloud.
Mastering the cloud, an obligation for the IT department.
The migration of a part of the applications to cloud solutions seems to be unavoidable. However, when this major player in the retail industry decided to move some of its applications to the cloud, the IT department was apprehensive about the costs of the cloud. The teams have identified the financial risk of the cloud very well. Rising costs can get out of hand. Controlling these new costs is a major concern for the IT department. It is in this context that the company is approaching Lucernys. The IT department chose to implement Lucernys’ IT Expense Management (IT-EM) billing data management tool for the cloud.
IT-EM ensures dynamic control of the cloud.
With the integration of IT-EM, the company’s objectives are threefold:
- Facilitate the breakdown of costs,
- Optimize costs,
- Identify savings opportunities.
Facilitate the rebilling of services.
The integration of an IT-EM tool is part of a FinOps approach. Upstream, the tool collects IT consumption information to enable analysis. For the company, IT-EM is specifically interested in cloud contracts. It scans invoices – issued by Azure in this case – in depth to provide an analytical and operational view of cloud billings. The scan of the invoices is completed by a detailed analysis of the consumption. This gives the company an overview of the distribution of expenses for each business unit. It accesses a breakdown of costs in the organization with a very high level of finesse.
Optimize cloud-related expenses.
Microsoft’s bill to the sign identifies VMs that do not consume. In a Pay As You Go approach, our customer can remotely shut down unused VMs, saving resources. However, the view offered by this billing is not fine enough. It does not give our client complete control over this cloud budget. The data provided by Microsoft is insufficient to fully rationalize service costs. On the other hand, the integration of the IT-EM tool reveals the precise usage patterns of the VMs and identifies unused time slots.
IT-EM aims at the full utilization of billed technical resources.
Finally, the analysis of the detailed consumption dashboards highlights areas for improvement. Cost optimization of the existing system must be done continuously.
Identified sources of savings.
The analysis of the company’s consumption data also aims to identify areas of savings. In fact, in a cost accounting logic, the dashboards provide a detailed view of the Azure platform consumption for each business unit. Beyond the consumption aspect, the IT-EM precisely links the consumption levels of each entity to each action taken. Data analysis seeks to identify hidden sources of savings. These savings would not have been captured without the reconciliation of these data.
Dynamic control of the cloud budget.
Controlling the costs of cloud services has become a major strategic issue within the company’s information system. Access to detailed cost breakdowns has proven to be decisive in achieving dynamic control of the cloud budget.
IT-EM delivers the data, the raw material for analysis and arbitration.
In a FinOps approach, the implementation of an IT-EM tool brings a precious finesse in understanding a cloud budget. It provides the necessary arbitration to control its evolution.
In the continuity of its historical offer of telecom cost control, Lucernys has set up a complete FinOps cloud offer to follow the evolution of the IT business. A strategy that shows Lucernys’ desire to maintain a strong proximity with its customers’ businesses.