Is Cloud Cost Anomaly Detection Important?

Published in
3 min read Feb 1, 2019

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by Harold Bell

Cloud cost anomaly detection is a vital tool in keeping your cloud costs under control. To put it in perspective, balancing your own budget isn’t always easy — even if you’re the most frugal person you know. Every now and then you may treat yourself to a new shirt or a nice meal from somewhere pricey. Occasionally you’ll find yourself hanging out a few more nights than you planned to. Unfortunately, there’s usually one thing that’s never on your mind when you splurge — how that will impact paying for things you actually need. That awareness hits when you’re staring at your credit card statement trying to remember how many drinks you had Thursday night. By that point my friend, the train has already left the station.

Oddly enough, balancing your cloud spend is very similar. Instead of treating yourself to material goods or libations, your organization periodically treats itself to new cloud applications. The development, testing, and configuration of these applications can lead to some very real financial consequences if not executed correctly. If you are an IT manager or cloud architect, it’s likely you’ve encountered one of the following scenarios:

  1. Your Dev team forgot to turn off compute instances that they are no longer using
  2. You’re using pay-as-you-go instances and not effectively utilizing the option to reserve instances that will be used for a long period of time
  3. You have no idea who spun up what, but you are still paying at the end of the month
  4. Your pricing plans were changed by the cloud provider and you missed the announcement
  5. You budgeted a certain amount for a new project but turns out you need more cloud resources for it. Your engineering team decides to go ahead with over-provisioning without adequate checks and balances in place

Industry leading analysts predict that organizations without a robust cost optimization strategy could end up overpaying by as much as 40%.

So, what do you do?

You could strengthen your IT staff. I mean, who wouldn’t want to hire more public cloud architects and app developers to guarantee each setting is compliant? The only problem there is, nobody has the money to do that — nor is it a full proof response. Let’s say on-boarding your cloud dream team was feasible, not all spikes in cloud spend are due to internal human error. There are also security related reasons that may explain a sudden increase in your bill. These situations involve bad actors who infiltrate your infrastructure and utilize your resources for malicious activities. So unfortunately, hiring 100 people with AWS Certified Solutions Architect — Professional certifications wouldn’t help in the slightest.

Early detection is the answer

Before we get into the details of how to solve this, lets first identify what “this” is. The expensive mistake I just described is what’s known as a cloud cost anomaly. And just as unpredictable as when they occur, there is the unlimited financial impact if left uncorrected too long. Your protection from spend anomalies lies in the ability to continuously monitor how your budget is being utilized in the cloud. Your management platform must be able to detect spend activity that doesn’t align to normal spending patterns. Once an anomaly is identified, you will also need visibility into what happened so you can prevent it going forward. Not surprisingly at this point, your answer to a balanced budget is real-time cloud cost anomaly detection.

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