Optimizing Multi-Cloud Costs with Blended Rates: Strategies for Effective Management

Introduction

As more organizations adopt multi-cloud environments, effective cost management becomes increasingly crucial. Managing costs across multiple clouds can be a challenging task, and failure to do so can result in wasted resources and increased expenses. One approach that can help organizations optimize their multi-cloud costs is using blended rates.

In this blog, we’ll explore the benefits of using blended rates for multi-cloud cost management, as well as strategies for effective implementation.

Understanding Multi-Cloud Cost Management Challenges

Managing costs in multi-cloud environments presents several challenges. For instance, organizations must keep track of various cloud resources and their associated costs, which can be difficult without a unified view of their cloud expenses. Additionally, managing multiple cloud vendor contracts, each with its pricing structure, can add to the complexity.

Another challenge is dealing with cloud vendor lock-in, where organizations are tied to specific cloud providers due to contracts, vendor-specific features, or lack of portability between clouds. This lock-in can make it challenging to optimize costs across multiple clouds, as it limits an organization’s ability to shift workloads to more cost-effective clouds or negotiate better pricing.

Strategies for Effective Multi-Cloud Cost Management

To overcome these challenges, organizations need to adopt effective multi-cloud cost management strategies. One such strategy is to establish clear cost management policies and guidelines that outline how cloud resources should be managed across multiple clouds.

Additionally, organizations should develop a centralized dashboard or platform that provides a unified view of their multi-cloud expenses. This dashboard should track all cloud resources and their associated costs, allowing organizations to identify trends and optimize spending across multiple clouds.

Finally, organizations should adopt a cloud-agnostic approach to avoid vendor lock-in. This approach involves using cloud-agnostic tools and services that allow workloads to be shifted between clouds, giving organizations more flexibility in managing their multi-cloud costs.

Understanding Blended Rates

Blended rates are an effective cost management approach that can help organizations manage their multi-cloud costs. A blended rate is a pricing model that combines different pricing tiers and models from multiple cloud providers into a single rate.

Blended rates can be used to optimize costs by reducing the complexity of managing multiple cloud vendor contracts. With a blended rate, organizations can pay a single rate for their cloud resources, rather than having to manage multiple pricing tiers and models across different cloud vendors.

Benefits of Using Blended Rates for Multi-Cloud Cost Management

Using blended rates can provide several benefits for organizations looking to manage their multi-cloud costs. For instance, blended rates can simplify cost management by consolidating multiple cloud vendor contracts into a single rate, making it easier for organizations to track their cloud expenses.

Additionally, blended rates can help organizations negotiate better pricing with cloud vendors. By consolidating their cloud resources under a single rate, organizations can negotiate better pricing with vendors, rather than having to negotiate individual pricing tiers for each cloud vendor.

Blended rates can also provide cost savings by allowing organizations to shift workloads between clouds based on cost and performance considerations. For instance, organizations can use blended rates to identify the most cost-effective cloud vendor for each workload, allowing them to optimize their multi-cloud costs.

Applying Blended Rates to Multi-Cloud Cost Management

To effectively use blended rates for multi-cloud cost management, organizations must follow several steps. First, organizations must establish a clear understanding of their cloud resource requirements and the associated costs.

Next, organizations should identify the cloud resources that can be consolidated under a single rate. For instance, organizations can consolidate similar cloud resources, such as virtual machines or storage, under a single rate.

Once the cloud resources have been consolidated, organizations should negotiate with cloud vendors to establish a blended rate. During negotiations, organizations should seek to achieve the best possible pricing while ensuring that the blended rate includes all the necessary cloud resources.

After the blended rate has been established, organizations should implement a cloud cost management platform that allows them to monitor their cloud expenses in real-time. This platform should provide a unified view of all cloud resources and their associated costs, allowing organizations to identify trends and optimize their multi-cloud costs.

Finally, organizations should regularly review their multi-cloud costs to ensure that they are optimizing their spending. This review should include a comparison of actual costs against budgeted costs, as well as an analysis of cost trends across different clouds and workloads.

Case Studies of Successful Implementation

Several organizations have successfully implemented blended rates for multi-cloud cost management. For instance, VMware Cloud on AWS uses a blended rate pricing model that combines the costs of VMware software and AWS infrastructure into a single rate. This blended rate provides customers with a simplified pricing model, making it easier to manage their cloud costs.

Another example is CloudHealth by VMware, a cloud cost management platform that allows organizations to consolidate their cloud costs under a single view. CloudHealth offers a range of features, including cost optimization, budget tracking, and cloud governance, to help organizations optimize their multi-cloud costs.

Best Practices for Using Blended Rates in Multi-Cloud Environments

To effectively use blended rates for multi-cloud cost management, organizations should follow several best practices. First, organizations should establish a clear understanding of their cloud resource requirements and the associated costs.

Next, organizations should identify the cloud resources that can be consolidated under a single rate. This consolidation should be based on workload and performance considerations, as well as the pricing models of different cloud vendors.

After the blended rate has been established, organizations should monitor their cloud expenses in real-time using a cloud cost management platform. This platform should provide a unified view of all cloud resources and their associated costs, allowing organizations to identify trends and optimize their multi-cloud costs.

Finally, organizations should regularly review their multi-cloud costs to ensure that they are optimizing their spending. This review should include a comparison of actual costs against budgeted costs, as well as an analysis of cost trends across different clouds and workloads.

Conclusion

Managing costs in multi-cloud environments can be a challenging task. However, using blended rates can simplify cost management by consolidating multiple cloud vendor contracts into a single rate. This approach can help organizations negotiate better pricing with cloud vendors, optimize their multi-cloud costs, and achieve cost savings.

To effectively use blended rates for multi-cloud cost management, organizations should establish a clear understanding of their cloud resource requirements, identify the cloud resources that can be consolidated under a single rate, and monitor their cloud expenses in real-time using a cloud cost management platform. Additionally, organizations should regularly review their multi-cloud costs to ensure that they are optimizing their spending and achieving cost savings.

About Enteros

Enteros offers a patented database performance management SaaS platform. It automate finding the root causes of complex database scalability and performance problems that affect business across a growing number of cloud, RDBMS, NoSQL, and machine learning database platforms.​​​​​​​​​​​​