Enterprises today are evaluating moving applications to the cloud – whether that cloud is public, private, hosted, or some combination of cloud landing zones. These enterprises typically cite key considerations such as agility, flexibility, security, and a smooth process for moving applications to the cloud. While these criteria are essential for successful cloud adoption, many enterprises rapidly prioritize cost management. The right cloud operating model should enable enterprises to manage costs better.

The complexity of managing cloud costs

According to IDC’s 1Q21 Cloud Pulse Survey, 85% of enterprises plan to increase their public and private cloud services spending, either slightly or significantly. This data point illustrates a trend among enterprises, showing that they want to accelerate their digital transformation strategies and the move to cloud operating models. Additionally, a smaller portion of enterprises in this same study felt they overspent on cloud services by approximately 30-49%, specifically on costs associated with storage, networking, and specialized services such as artificial intelligence (AI). More private cloud users (37%) than IaaS (17%) felt this way.

With these market dynamics in mind, organizations need to more thoughtfully evaluate cloud landing zones, architectures, and specialized services that support enterprise applications and workloads. They need to align them with operating, financial, and business models. Assessing and prioritizing application cloud readiness, along with evaluating the right mix of public and private infrastructure resources coupled with new operating models, is already a complex process. Add to this the importance of determining ROI metrics for both CapEx and OpEx spending, and the complexity of realizing the expected outcomes for cloud success grows. The cloud promises speed, flexibility, and agility, but the initial promise of lower CapEx still needs to be strategically reexamined.

The value of professional services

For many enterprises, this new layer of evaluation and measurement adds more complexity to the job of the already resource-constrained IT professional. IDC believes that, for some enterprises, this burden will become overwhelming and potentially impede the adoption of cloud. IDC believes enterprises should look to professional services firms with defined methodologies and repeatable best practices for moving applications and workloads to the cloud. They have the tools and resources to help with this critical step in the due diligence process for cloud adoption.

As part of the consulting engagement, services firms will inventory, assess, and prioritize each application and workload, determine appropriate architectures best suited to support the business requirement of these workloads, and devise a road map for migration. Within the initial consulting phase, services firms should provide detailed cost analysis and ROI models for CapEx and OpEx savings and expenditures across all landing zones, encompassing hardware, software, and services. They should also conduct periodic financial and operational reviews of how workloads and applications are performing over time, including any incremental resource costs.

According to IDC’s research, specialized services appear to be the main culprit for racking up overspending charges. A proactive assessment service can help ensure that any overspending is kept in check. As part of the lifecycle of services provided, IDC recommends continuous optimization and reevaluation of the efficacy and performance of application and workload alignment of the infrastructure, software, services, operations, and management costs associated with each cloud deployment.

Enterprises can take full advantage of the agility and flexibility that cloud affords—while also managing the costs and economics of digital transformation more effectively. To be sure to get the most from cloud investments, start by leveraging the experience of a third-party professional services firm with offerings spanning business, technology, and operational expertise.

To learn more about the value of professional services in helping you manage cloud costs, read our IDC Technology Spotlight on Cloud.

Message from the sponsor

For professional services that help you manage cloud costs, look to Cisco Customer Experience (CX) Business Critical Services for Cloud. Cisco CX provides business, technology, and operational expertise as well as visibility and full-stack observability across the applications, network, and infrastructure that organizations can use to control their cloud spend. How? By providing assessments and analyses on cloud application and workload performance to deliver actionable, analytics-driven expert recommendations throughout the lifecycle. With the insights gained, organizations can make more informed decisions to avoid overspending and continually optimize their cloud costs, while also leveraging Cisco cloud technology capabilities to deliver ongoing application and workload monitoring and cost optimization.


Leslie Rosenberg

Research Vice President