Do you really know what your cloud computing invoice will be next month?

Managing cloud spending remains the top challenge, over security, for cloud users in 2024. Identifying the source of these variations often requires labour intensive research into detailed bills every month; glamorously known as FinOps. In this blog past, we will demystify some of the sources of this billing complexity and how to avoid them.

Arriving on-budget with your cloud computing costs can seem a little bit like a game of chance. The Flexera 2024 State of the Cloud Report measured an average 15% average cloud budget over run. Cloud bills are difficult to understand and manage since they are long, complicated and hard to unpack. So perhaps the game has been rigged?

Let’s look at three key reasons that cloud bills fluctuate month to month.

Reason 1 – Surprise fees

In the category of surprise fees, include egress fees, API charges and logging fees. These are not really surprises since they will appear somewhere in your list of contracted services, but since they are hard to estimate, they are often under-estimated or simply ignored in the architecture phase.

Egress fees are inherently variable, for example when you have a business intelligence (BI) application pulling data on a self-serve basis, or when you experience a sudden and significant usage spike on your web traffic. Third-party monitoring tools, such as New Relic or DataDog, are very useful but can generate significant API charges. That’s why you should choose alternatives that, unlike the hyperscalers’ claims, truly help avoid exit fees.

Reason 2 – Exchange rate

A second reason for cloud billing variability is fluctuation in the exchange rate. We shouldn’t expect an IT manager to be managing exchange rate risk, but the bottom line is that American cloud provider services are priced in USD, and then converted to CDN for payment convenience of their Canadian customers.

For example, if you signed a contract for $10,000 USD of cloud services in December 2023, your first bill would be $13,157 CDN. But for the same $10,000 USD of services in December 2024, you would pay $13,888, or 4% more, even though your prices were “guaranteed” for three years.

Given the current geopolitical instability and the impact it will have on the currency exchange rate, it’s a tedious task for IT departments and FinOps to manage and predict cloud costs for any Canadian organisations.

Reason 3 – Consumption-based billing

One of the advantages of cloud services is the flexibility to scale and add resources as required. Typically, clients have access to the most advantageous pricing if they commit to a certain consumption level for a fixed period of time, usually one or three years. Consumption of resources over and above the committed level is billed at a “pay as you go” rate, which can change at any time. Therefore, the overage consumption of “X” resources at the “pay as you go” rate will cost one amount in one month and may cost something different the next month.

Hyperscalers will also have different rates in different regions for the same service. Therefore, if you migrate workloads from one region to another, your billing may change as a result.

How to make your cloud billing predictable again

Given the current economical conditions under which private businesses and public organizations operates, the incapacity (inability) to predict costs should be of concern to anyone trying to manage their expenditures to match their budget. There is a simple way to remove all this uncertainty and angst. The solution is Micrologic’s sovereign Cloud, Cirrus.

• Transparency
  Cirrus has no egress, API and other hidden fees. If your quote has 12 lines, then your bill will also have 12 lines; no more.
• Predictability
  Cirrus services are quoted and billed in Canadian dollars; you do not have to worry about exchange rate fluctuations.
• Preferred rate
  With Cirrus, if your resource consumption exceeds your committed level, the overage will be billed at the preferred rate as your committed resources, not an arbitrary pay-as-you-go rate.

Wait no further, stop being at the mercy of unpredictability and undergo month to month variations. Make Cirrus your cloud of choice and take back control of your cloud budget.