Cost Management for Projects That Use Public Cloud

Project cost management 

Cost of the project is one of the biggest aspects of the management. This is a typically achieved through the set of well-established approaches. According to PMI, the processes that help with project cost management are:

1. Resource Planning
2. Cost Estimating
3. Cost Budgeting
4. Cost Control

Let's consider how public cloud associated costs can be addressed withing this framework (cloud costs will be only the part of all project costs, yet we will focus on them specifically)

Public cloud resource planning 

Public cloud can be considered as a set of resources which depend on the cloud service model: PaaS (Platform-as-a-Service), IaaS (Infrastucture-as-a-Model), or SaaS (Software-as-a-Service). More specifically those resources would be:

1. IaaS: server instances usage, storage space, network bandwidth, inbound and outbound traffic, load balancing, etc. 
2. PaaS: developers accounts, technologies/services/frameworks usage, etc.
3. SaaS: user account, applications/services usage, etc. 

Based on the type of the cloud, resource requirements should be defined.

Public cloud cost estimating 

As soon as we have resource requirements defined, we can use our WBS (Work Breakdown Structure), activity duration estimation and resource rates to make the estimation for the cloud related costs of the project.

Resource rates are provided by the CSP (Cloud Services Provider) and sometimes the costs structure is not very easy to grasp. For example, for AWS (Amazon Web Services), EC2 it looks like this. You have to decide about a lot of things to be able to calculate the costs, most likely this will require involvement of the project's System Architect or Tech. Lead. (There are also some online calculators, yet the process is not that simple)

Public cloud cost budgeting 

After the estimation of the required resources is done we can use it with WBS and project schedule to come up with the cost baseline.

Cost baseline for the whole project will include different costs, we are considering only cloud-related costs here.

As the baseline goes over time, it will go through the different phases of the project, each phase will require its own specific amount of the cloud resources. It would be pretty typical to expect that in the beginning of the project the project team will require the cloud resources for prototyping and closer to the project end a lot of testing will be performed in the cloud. Speaking of the testing activities in the cloud, makes sense to mention that load/scalability/performance testing can be most resource consuming and hence it can require significant part of the whole project cloud budget.

Public cloud cost control

This part is of the whole cost management processes set can look as the most fitting to the current public clouds state of the art. As one of the main cloud's features is "Measured Service" (see NIST cloud definition I mentioned in my previous post Cloud-related projects: when your backend is really based on cloud services?) you are usually in full control of the cloud costs to the moment. This means that you can use very structured reports to see how the cloud spendings are attributed. This can help a lot to revise the estimates, make needed updates or corrective actions. This part is where the public cloud is typically shining.