As we get more information from numerous research groups around Cloud adoption and how businesses are managing the growing cost of these business assets, trends are emerging and highlighting some concerning patterns of over-spending.

Interestingly, the take-home stats all seem to be consistent and familiar. Cloud over-spending is estimated at around 25-30%; almost identical to levels of over-spending reported across the desktop, datacenter and SaaS applications. It appears to be IT’s not-so-golden ratio of investment to wastage; the only difference being the rate at which Cloud adoption and over-spending is growing.

It’s not as if the solution to tackling this over-spending across IT does not exist; the answer as we know is to invest and modernize IT Asset Management (ITAM) and Software Asset Management (SAM). Research by Gartner analysts identified that implementing a robust SAM program with adequate tools can reduce software costs by 30%.

ITAM & SAM solutions are much more powerful now too, with tools like Certero’s Unified Platform bringing once siloed ITAM & SAM disciplines together; the logic being that to optimize software licensing you also need full visibility and control over hardware as well. So now, a single unified ITAM & SAM platform can give you the information needed to optimize IT technology assets right across the enterprise, including optimizing Cloud IaaS/PaaS costs.

However, it’s becoming apparent that businesses are not using their ITAM/SAM resources to control and optimize Cloud, despite these teams already being skilled at bridging the gaps from technical to commercial management. SAM teams are knowledgeable with vendors and are adept at keeping control and finding cost-savings, all whilst navigating complex commercial licensing terms.

Although controlling Cloud cost is reportedly still at the top of many CIO’s agendas, Cloud Teams or the ‘Cloud Centre of Excellence’ are commonly comprised of stakeholders from FinOps, Security, Legal, Cloud Architects, but notably not IT Asset Management.

This may be due to an antiquated view of what IT Asset Management is, as John Lunt, CEO of On-prem and Cloud Asset Management specialists Certero comments:

“ITAM & SAM are not simply disciplines that count how many computers or licenses you have – the insight that asset management brings is also about measuring the business value obtained from technology investments and gaining greater insight, which should be used to make better decisions as businesses transform”.

The importance of measurement has also been raised by James Anderson, VP of Research at Gartner:

“With Covid, everyone’s seeing digital acceleration, but very few organizations are tracking what they’re getting in terms of business outcomes”. James continues “Where are people wasting money? They’re not using business metrics to influence investment. They’re doing what people tell them to do”.

This appears to be true when deciding how to govern Cloud costs and pulling together a Cloud Center of Excellence team that doesn’t include ITAM. It’s creating another silo to be managed, another blind spot when you could have the insight of a unified view of all IT usage, cost and value.

Let’s also not forget where the Cloud Centre of Excellence concept originally comes from… AWS (courtesy of Stephen Orban, when he was Global Head of Enterprise Strategy back in 2016). As other IT asset management disciplines have matured, the mistakes of the past are at risk of being repeated.

With enough time passing to recognize that Cloud Teams aren’t always equipped to make the required cost-optimization of Cloud assets a success, maybe it’s time to circle-back to ITAM & SAM and stop thinking of Cloud as a separate silo to be managed and remember why we’re moving away from the chaos of disparate ITAM tools to a fully unified solution, says John Lunt, CEO of Certero:

“Optimizing Cloud in contrast to on-premise assets really is not a ‘new world’ vs ‘old world’ scenario. The mechanics by which you manage Cloud IaaS/PaaS is slightly different but ultimately you need the same things: Visibility, Skilled People with an understanding of the vendors, strong Governance Processes you can measure and a way to report on Costs and Optimization. That is ITAM & SAM and solutions like the new Certero for Cloud provide the tools you need. Plus, it’s on the same management platform that can manage your on-prem and datacenter assets, so you can really get a grip of everything and see the big picture metrics across all your technology investments. That’s what really works to optimize costs”.