6 Strategies for Maximizing Cloud Storage ROI

Enterprise IT leaders face a daunting challenge: delivering innovative solutions through new applications, data services, and AI investments while adhering to tight budgets. Cloud computing, often at the heart of these initiatives, presents a particularly uncertain landscape, especially regarding storage costs, which can significantly impact IT budgets.

Rising expenses in cloud data storage have prompted many organizations to reconsider their strategies, leading to a trend of repatriation as enterprises seek more control during these unpredictable economic times. A February 2024 Citrix poll revealed that 94% of organizations had shifted some workloads back to on-premises systems, driven by concerns over security, performance, costs, and compatibility.

In response, senior business and finance leaders might consider a swift transition back from the cloud to curb expenses. However, cloud repatriation carries its own set of risks, including potential egress fees, the need for new hardware, security investments, and other infrastructure costs. Additionally, companies may face the challenge of re-hiring staff previously laid off. Furthermore, there’s a significant opportunity cost associated with missing out on enhanced collaboration, innovation, agility, and access to advanced cloud-native tools and services, including AI and machine learning.

Optimize Your Cloud Strategy Before You Repatriate

Deloitte analyzed anonymized data from several FinOps engagements to assess optimization efforts, finding that businesses can save up to 45% (15% on average) on cloud costs by optimizing across waste management, consumption management, and purchasing best practices levers.

Common tactics of re-architecting applications, managing cloud sprawl and monitoring spend using the tools each cloud provides are a great first start. However, these methods are not the full picture. Storage optimization is an integral piece. Focusing on cloud storage costs first is a smart strategy since storage constitutes a large chunk of the overall spend. More than half of IT organizations (55%) will spend more than 30% of their IT budget on data storage and backup technology, according to our recent State of Unstructured Data Management report.

The reality is that most organizations don’t have a clear idea on current and predicted storage costs. They do not know how to economize, how much data they have, or where it resides. By gaining a thorough understanding of data and its needs, IT can place high-priority data on top-performing storage while moving older, less important data to cheaper storage. The point is that if you don't efficiently manage data over its lifecycle, both options will be expensive.

Six Ways to Cut Storage Costs and Optimize Cloud Investments

Get holistic visibility on data to make the best cloud decisions. Understanding the characteristics of enterprise data—which is primarily file or object data not sitting in a database—is critical to optimizing cloud investments and right-place data. Top metrics include top data owners, most common file type, most common file size, total data, data growth rate, and data by time of last access (which indicates active or hot data versus inactive or cold data). Metadata searches can also highlight files containing PII, IP, or other sensitive data that have unique storage and security requirements.

Calculate current storage costs across all storage technologies in your data centers and/or the cloud. Since most organizations have a hybrid cloud approach, you need to calculate the cost of both on-premises storage and backups as well as cloud storage. Calculating this across various accounts, buckets, and storage silos can be time-consuming and laborious. Look for automated ways to deliver these costs, such as through a data management solution.

Predict future storage costs based on data growth rates. Unstructured data typically grows at 20% or more each year, so when looking at how much you can save, consider current costs and future projections. An ongoing data management strategy is needed to save costs as data continues to pile up.

Include backup and disaster recovery costs in your analysis. Even in the cloud, most organizations create additional data copies for backups, snapshots, and multi-site redundancy. Be sure to include these costs in your analysis to get the full understanding of your true costs and potential savings.

Model new storage plans for savings opportunities. Your data management analysis should detail how much you can save by leveraging the various cloud storage tiers and right-placing cold data at the appropriate lower tier. In most clouds, the cheaper storage tiers are often 20x less expensive than the performance tiers.

Create an ongoing data lifecycle management plan. Rather than moving data to the cloud in a “set and forget” fashion, long-term savings require continuous refinement to accommodate data as it ages or when other conditions materialize, such as the need to move data under compliance rules to secure archival storage. With more than 12 classes of storage on some of the popular clouds, you’ll want to leverage them all at the right time. Don’t keep data in top-tier file storage once it is no longer in active use, such as at the completion of an analytics project or marketing campaign. Ensure that users can access tiered data from the lower storage tier without having to bring it back to a more expensive tier so that you don’t lose the savings.

A Final Word on Cloud Storage

As organizations look to reduce cloud waste this year, attaining a data-centric perspective has multitude of benefits. Analysis can indicate data growth rates, hot versus cold data, compliant data, and more so that IT can make the best decisions balancing data requirements, business needs, and budget. This way, you can continue to embrace the cloud for digital business initiatives without starting alarm bells in the CFO’s office.