• Adrian Bradley, Partner |

Operating your technology in the cloud offers an array of powerful advantages. It gives your IT infrastructure greater agility, flexibility and scalability, while strengthening your security and operational resilience. It offers instant access to the latest features and functionalities, freeing your IT team to focus on strategic work.

Traditionally, pricing for cloud services got cheaper over time with each Cloud Service Provider (CSP) slashing prices on commonly used services.

In the face of rising inflation, however, this downward cost dynamic may be slowing, or even going into reverse:

  • AWS had not reduced the price of any of its compute services for over two years at the time of writing.

  • Google has actually increased the price of some of GCP storage offerings – by between 50% and 300%.

  • Microsoft has upped the price of its 365 subscriptions – in some cases, for the first time in ten years. Might that mean Azure increases are in the offing?

Our latest insights show while intelligent use of cloud offers improved inflationary protection relative to on-premise, the benefit is most pronounced where cloud native adoption is prevalent (e.g. serverless and native service use), relative to more dated cloud architectures where less transformation has been undertaken. As inflation rates climb, cloud adoption can be an effective hedge.

Here are four cost-minimisation strategies businesses can put into action in the cloud:

  1. Migrate to the cloud ASAP
    The cost of running data centres can only go north, including hardware, energy, and real estate costs. While the cost of IT operations will still come down. These rises will manifest in both gradual increases and more pronounced hikes in line with major IT and contract renewals.

  2. Optimise your cloud footprint
    Thanks to the containerization and serverless technologies CSPs offer, you can quickly and easily change providers, or move the location in which your infrastructure is hosted. That lets you continually optimise cloud costs, by regularly switching to the cheapest CSP of the computing and storage services you use.

  3. Lock in savings
    Once you’re on the cloud, you can insulate predictable workflows from inflation by fixing pricing in advance. With Cloud prices showing little movement, make sure you lock them in while they’re still low. Headroom created through efficient use and FinOps creates capacity for more onboarding with flat costs.

  4. Leave legacy behind
    CSPs constantly introduce new features to their platform in response to customer demand. They make these up to 25% cheaper than their legacy equivalents in some cases. So being on the cloud gives you more powerful functionality and continual innovation for less.

It’s time to act.

The business case is clear - with inflation on the rise, organisations operating on datacentres should move their infrastructure to the cloud as soon as it’s feasible. Meanwhile, those already there should take advantage of the strategies that will keep their IT operating costs down.

KPMG’s Cloud Transformation and Advisory team has extensive experience of helping organisations migrate to the cloud as smoothly and cost-effectively as possible. We can help you optimise your cloud infrastructure for maximum impact and minimum cost. Please get in touch to find out how we can support your IT function in inflationary times.