RightScale Estimates Companies to Waste More Than $10 Billion in Cloud Spending Over the Next Year

Grazed from RightScale

RightScale Inc., a demonstrated leader in enterprise cloud management, today announced that, if left unchecked, wasted cloud spend over the next year will top $10 billion. For more details, read the companion RightScale blog: Where Is the $10B in Waste in Public Cloud Costs?

"Cloud providers claim they are getting better at helping companies reduce some of their cloud spending. For example, AWS recently claimed it saved AWS users $500 million by alerting customers when they were overpaying," said Kim Weins, VP of Cloud Cost Strategy at RightScale. "Unfortunately, this is just a drop in the bucket. RightScale has seen that companies waste, on average, 35 percent of their cloud spend. This equates to $6.4 billion in annualized wasted cost for AWS alone. For the top three public cloud providers (Amazon Web Services, Microsoft Azure, and Google Cloud Platform), this represents annualized waste of $10 billion."

RightScale Optima Statistics on Wasted Cloud Spend 

 

Complexity in cloud pricing and billing is a key reason for wasted spend. A typical cloud bill can contain millions of line items that represent tens of thousands of different resource types and price points. AWS alone has more than 70,000 price points for compute instances.

RightScale Optima, a collaborative solution for cloud cost management and optimization, was launched just six months ago and is already managing billions of items in cloud bills and helping customers to identify savings opportunities. Combined with data from more than 60 in-depth cloud cost assessments performed by RightScale to help customers optimize cloud costs, statistics from RightScale Optima illustrate the source and causes of wasted cloud spend.

  • Rightsize instances: Forty percent of instances are sized larger than is required for the workload and could be rightsized without impacting performance of the application. Each oversized instance is wasting 50-75 percent, resulting in 11-16 percent of all cloud spend being wasted.
  • Schedule VMs: Many virtual machines in the public cloud are left running 24x7 rather than being turned off during times that they are not in use. For example, shutting down development instances that are not used at night and on weekends saves 67 percent of the spend.
  • Choose the correct regions: Thirteen percent of all cloud instances are running in more expensive regions, even though the cloud provider offers a less expensive location nearby. This results in three percent of all cloud costs being wasted.
  • Utilize discounts: Companies find it difficult to choose the best discount options and forego savings that can range from 20-70 percent. For example, AWS has more than 60,000 discounting price points just for reserved instances, while Azure recently announced a new reserved instance offering.
  • Delete unused storage: Cloud users neglect to delete storage that is no longer used. Virtual machines are shut down, but the storage that was attached is often left running.