Every business around the globe is feeling the effects of the economic turmoil driven by COVID-19, which naturally affects IT investments. According to IDC, worldwide IT spending is now expected to decline 2.7% this year. Hardware, devices, and IT services will all decline, while spending on infrastructure and software is expected to grow, albeit more slowly than in 2019. IDC notes that much of that infrastructure and software spend is driven by cloud infrastructure and cloud services. Conversations with CloudHealth customers validates this key point and revealed some additional insights.
First, even before COVID-19, customers’ approach to cloud had been changing. There’s a much sharper focus on reliability and scale as opposed to pure speed and experimentation. The present circumstances only reinforce that change. And secondly, customers had already been shifting CAPEX to OPEX, but that will accelerate—as it always does during uncertain times. Lastly, with everyone working from home, there’s a huge surge in remote enablement and productivity tools. All of these things are continuing to drive cloud spending and our customers have become pretty adept at using CloudHealth to optimize spend. However, even our most savvy customers need to adapt to a new set of questions and challenges as they scrutinize and extract the most value out of every dollar.
COVID-19 and the cloud
To cite just a few examples, customers have told us that they may be wasting more money by not buying enough reservations and/or Savings Plans, rather than buying too many. As a result, they’re getting more aggressive in their coverage rates. But what makes the most sense for them? For companies that are seeing a surge in demand for remote productivity tools, optimizing savings plans and reservations has become much more complicated. They need a strategy for handling the new demand. But how long will it last? Just a few months? 6 months? A year? How do you max reservations without being stuck with a bunch of unused reservations as soon as September? Currency fluctuations can also affect your cloud bill and reservation buying strategy. Some customers have also relayed that there is increased volatility and instability in the AWS spot instance market. Consequently, they need a strategy for using more on-demand instances.
These are just a few examples of the issues facing cloud customers. CloudHealth is here to help. CloudHealth has introduced a new Optimization Desk specifically to help our customers who are reacting to the sudden shift in market dynamics. The Optimization Desk provides a service focused on the optimization levels of the cloud maturity model:
What is the CloudHealth Optimization Desk?
As part of the service, CloudHealth will be reaching out to our customers and creating a no-cost report card based on CloudHealth’s executive business review (EBR) artifacts and Optimization Playbook. The report’s goal is to consolidate and improve the artifacts, align them to the cloud maturity model, and show customers where they can realize savings. The report will feature a Traffic Light report focused on the top 5 opportunities customers have to optimize, plus it will show you how you compare to CloudHealth benchmarks and KPIs. Customers can then work with their CloudHealth technical account managers and sales engineers to prioritize and implement recommendations.
As we create reports, implement recommendations, and get feedback from customers, we’ll apply lessons learned and incorporate into our best practices and Optimization Playbook. As CloudHealth rolls out this new service and begins building the report cards, there are several other resources you can tap for more on optimizing your cloud investments:
- Live Q&A Webinar: Integrating AWS Savings Plans. This quick, 30-minute session, featured an expert panel answering customer and partner questions on AWS Savings Plans to give CloudHealth users a better understanding of how to integrate Savings Plans into their existing reservation strategy.
- AWS Savings Plan toolkit: All of our most useful resources to help you take advantage of AWS Savings Plans.
CloudHealth recognizes that every customer is impacted differently by the disruption brought on by current economic instability. Some customers need to reduce spending, some need to freeze, some need to shift, and some need to increase investments to meets the needs of remote customers and workers. CloudHealth is here to help you make the most informed decisions. Together we’ll weather the storm and CloudHealth will do everything we can to be an indispensable partner in your digital transformation. If you’re an existing CloudHealth customer and want to find out how the Optimization Desk can help you, please reach out to us at [email protected]. We’re in this together.
