A Guide to Cloud Cost Management with ServiceNow

Executive Summary

In today’s dynamic business environment, cloud computing has emerged as a fundamental component, offering unparalleled scalability, agility, and access to advanced technologies. However, the challenge of managing cloud expenditures effectively cannot be overstated. ServiceNow’s comprehensive platform for cloud cost management is a pivotal solution, providing the tools and insights needed to gain visibility, optimize usage, and control cloud expenses. This blog delves into the importance of cloud cost management, the benefits it offers, key strategies for effective management, and how ServiceNow’s robust offerings can transform cloud cost optimization.

Key Takeaways

• Cloud Spending Surge: By 2025, over half of enterprise IT budgets will be allocated to public cloud computing, emphasizing the critical need for effective cloud cost management.

• Cost Management Benefits: Cloud cost management can lead to significant cost savings, architectural optimization, improved performance, efficient resource usage, and predictable expenses.

• Strategic Approaches: Key strategies include organizational policies, right sizing, automatic scaling, power scheduling, removing unused instances, and leveraging discount instances.

• ServiceNow’s Solution: ServiceNow provides a comprehensive suite for cloud cost management, integrating IT Asset Management to offer visibility, efficiency, and cost reduction.

• Neev Systems’ Expertise: As a ServiceNow partner, Neev Systems delivers comprehensive solutions to optimize customer service and IT operations, enhancing efficiency, security, and customer-centricity.

Introduction

The Cloud has become an essential part of today’s businesses. It has transformed how businesses operate, offering scalability, agility, and access to powerful technologies. But with that power comes the responsibility of managing cloud spending effectively. Unmonitored cloud costs can quickly spiral out of control, eating into your IT budget.

Gartner forecasts that by 2025, enterprise IT spending on public cloud computing will surpass 51%. With more than half of IT budgets soon allocated to the cloud, it’s crucial to consider whether your cloud spending is optimized. Recent surveys reveal that 30% of cloud spending is wasted. Is your organization managing cloud expenses more efficiently? How can organizations identify the sources of cloud overspending and optimize their spending for maximum business benefit? 
This is where ServiceNow steps in as a game-changer for cloud cost management. ServiceNow provides a comprehensive platform that empowers organizations to gain visibility, optimize usage, and, ultimately, control their cloud spending.

What is Cloud Cost Management?

Cloud cost management, also known as cloud cost optimization or cloud spend management, is the process of managing and optimizing expenses associated with cloud computing resources. Its primary goal is to minimize costs while maximizing the return on investment from cloud services. This involves various strategies and practices aimed at reducing unnecessary spending and ensuring that cloud resources are used efficiently.

What Are The Benefits Of Cloud Cost Management?

• Cost Savings: The primary benefit of cloud cost management is the reduction in expenses. By actively managing cloud costs, companies can avoid spending on unnecessary services and underutilized resources, leading to significant savings.

• Architectural Optimization: By better understanding cloud spending, companies can optimize their cloud architecture, making adjustments to enhance efficiency and performance.

• Improved Performance: Proper cloud cost management ensures that cloud services are right-sized for business needs, avoiding the pitfalls of overprovisioning (which leads to overspending) and underprovisioning (which can hamper performance).

• Efficient Usage: By closely monitoring cloud service usage, companies can reduce waste and improve efficiency, leveraging features like automatic scaling and load balancing to make the most of their resources.
• Predictability: Cloud cost management provides insights into current resource usage, helping organizations predict future costs and avoid unexpected expenses.

Key Strategies for Cloud Cost Management

• Organizational Strategies: Implement regular reporting and reviews of cloud service consumption, conduct audits of billing and financial data, establish provisioning policies to ensure compliance, and develop governance frameworks to control utilization and spending.

• Right Sizing: Determine the appropriate size of cloud instances for the organization’s needs to ensure efficient and cost-effective usage.

• Automatic Scaling: Use automatic scaling to adjust resources based on demand, scaling up when needed and scaling down when not, to optimize resource use and costs.

• Power Scheduling: Implement power scheduling to turn off or reduce resources during non-peak times, such as after business hours or on weekends, to save costs.

• Removing Unused Instances: Eliminate unused instances to save money and reduce security risks associated with idle resources.
• Discount Instances: Utilize discount instances for non-critical tasks to save costs, as these do not guarantee availability but can be sufficient for less crucial operations.

Cloud Cost Management with ServiceNow

ServiceNow offers robust Cloud cost management services to help businesses Improve cloud resources, manage costs, and reduce risk effectively. The ServiceNow Cloud Cost Management (formerly known as Cloud Insights) provides tools to track and manage cloud expenses, uncover resources, categorize spending, offer cost-saving recommendations, and automate cost optimization tasks.

By integrating Cloud Management with IT Asset Management (ITAM), ServiceNow provides comprehensive visibility into cloud usage and spending, enabling businesses to maximize efficiency and minimize costs. ServiceNow’s platform combines Software Asset Management (SAM), Hardware Asset Management (HAM), Application Portfolio Management (APM), and Cloud Cost Management (CCM) into a single system, facilitating secure, efficient, and effective cloud management.

Featured apps and capabilities of ServiceNow for Cloud Cost Management

• Cloud Cost Management Workspace: Centralized platform designed to help businesses effectively manage their cloud expenditures across various cloud service models, including Software as a Service (SaaS), Infrastructure as a Service (IaaS), and Platform as a Service (PaaS). It serves as a dynamic hub where users can access critical insights into their cloud spending, optimize their cloud infrastructure, analyze expenditure trends, and ensure accountability across departments. 

• Cloud Spend Analytics: Analyze daily cloud spend across service categories, cost centers, purchase options, business applications, and regions to gain a full overview of your cloud expenses. Generate cloud spending, trend, and forecast reports, and adjust to improve spending automatically. 

• Cloud Storage Customization: Optimize cloud spend by rightsizing storage according to actual needs—eliminate unused storage and resize where capacity isn’t fully utilized. Each volume configuration provides reservation savings options

• Cloud Compute Enhancement:  Scale up or down cloud instances for efficiency and cost savings. Use reserved instances for predictable workloads, cutting costs compared to on-demand rates. Continually review resources, refine strategies as workloads, and evolve for lasting savings.

• Cloud Database Optimization: Unlock cost-saving suggestions for refining cloud database usage and cost-efficiency. Extend existing compute optimization features to databases within your cloud environment. Assist optimization endeavors for specific databases on AWS, Azure, and Google Cloud Platform.

• Cost Tag Categories: Cost Tag Categories involve organizing and standardizing tags applied to cloud resources within an environment. These tags help classify resources based on various attributes such as department, project, application, environment, or owner. By normalizing tags, organizations can streamline cloud cost reporting and gain better visibility into how resources are utilized across different dimensions. This enables more accurate cost allocation, budget tracking, and optimization efforts.

• Reservation plans: Provides guidance for optimizing reserved instance utilization and cost-effectiveness in cloud environments. It helps organizations identify opportunities to purchase or modify reserved instances based on usage patterns and workload demands, maximizing cost savings and ensuring adequate resource capacity.

• Bring your own license (BYOL): It enables organizations to use existing software licenses in the cloud, optimizing cost savings and ensuring compliance. BYOL combines Software Asset Management and Cloud Cost Management to assess compliance with major vendors like Microsoft and Oracle across hybrid infrastructures, improving software license optimization.

•  License and cloud cost simulator:  It helps organizations build a business case for moving resources to the cloud by understanding costs across different providers. It offers recommendations based on end-of-life and utilization, compares on-premises and cloud costs, and simulates costs for matching on-premises VMs to cloud VMs, aiding in decision-making and cost estimation.

• Asset Management Executive Dashboard: This solution by ServiceNow offers IT executives a unified view of software, hardware, and cloud assets. It provides essential metrics like total spending, potential savings, and asset health, empowering strategic decision-making and enabling organizations to define and track success goals aligned with business outcomes.
• Cloud Budgeting: Cloud budgeting involves the strategic allocation and management of financial resources for cloud services, aiming to optimize spending while achieving business objectives. It encompasses activities such as setting budget targets, monitoring expenditures, identifying cost-saving opportunities, and aligning spending with organizational goals. Effective cloud budgeting enables businesses to control costs, maximize ROI, and ensure efficient utilization of cloud resources.

How Neev Systems Can Help?

As a ServiceNow partner, Neev Systems offers comprehensive ServiceNow Customer Service Management solutions to deliver an agile, seamless customer experience through a single, integrated platform. Our services empower service agents with accurate data, intelligent case management, streamlined workflows, and automation, ensuring customer issues are handled efficiently. Our end-to-end ServiceNow services help you unlock the platform’s full potential and deliver personalized customer experiences. From planning and implementation to support and upgrades, we ensure faster roll-outs, seamless integrations, and effective adoption of ServiceNow solutions.

Additionally, we help enterprises build agile IT and security organizations, creating resilient, secure, and up-to-date IT infrastructures. Our IT and security transformation services include assessing and identifying vulnerabilities, implementing robust security protocols, and modernizing ITSM and SecOps through ServiceNow. This approach replaces fragmented tools with automation, streamlining workflows to enhance customer experience and productivity.

Partner with Neev Systems to transform your customer service and IT operations and achieve a more efficient, secure, and customer-centric organization. Contact us today to get started!