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Manage IT Costs by Managing IT Capacity

Authors Photo Precisely Editor | May 24, 2021

Capacity management provides organizations with a framework for making important decisions about the level of information technology resources they require to operate effectively and efficiently. That can be a delicate balance at times; excessive resources result in waste, whereas insufficient resources hamper an organization’s ability to operate effectively.

It can be a challenge to plan for future needs. In today’s business environment, things can often move very quickly. If an organization is poorly positioned to act rapidly, it could miss out on key opportunities to improve efficiency, capture market share, and roll out digital initiatives that drive competitive advantage.

As organizations shift to a cloud integration strategy, their capability to scale up and down quickly can be dramatically accelerated. Although that has clear advantages, it also creates a new problem for many organizations: when adding IT components and additional capacity is quick and easy, and when such costs are treated as operational expenditures, IT expenses can quickly grow out of control.


Effective capacity management allows for an automated view of system configurations, storage, database, and network bandwidth, and it provides insight as to the most cost-effective way of provisioning those resources. Simply put, capacity management provides a holistic view of your IT landscape, along with clear visibility as to how those resources are being used and which resources may be underutilized.

Capacity management is different for the cloud

The inherent elasticity of cloud environments, the ability to quickly and easily add computing resources, is a distinct benefit. At the same time, that elasticity has a few significant pitfalls. It’s easy to turn on new capacity, and that can often be a priority when there is an urgent business need. Turning it off is usually a lower priority. Most of us have heard stories about a development team that spun up a new instance of a cloud service to complete a high-priority project, but then later neglected to turn it off. The result was a hefty bill for cloud services that were no longer needed. Cases like that can continue to cost a company money indefinitely, or at least until someone notices it. In large organizations, you can multiply this scenario many times over. The resulting costs can be significant.

Even if your organization is effectively ramping resources up and back down at the right times, the inherent elasticity of the cloud can lead companies to waste money. When temporary capacity is required, many IT leaders will employ a “cloud-bursting” strategy. They will order up additional resources on short notice when they are needed. Such resources tend to be more expensive than longer-term contracts, so an over-reliance on cloud-bursting can also lead to waste.

On the surface, it might seem that capacity planning is less important in the cloud than for on-premise deployments, but because cloud shifts organizations to an operating cost model, excess capacity can quickly become a problem. Poor visibility into that problem can cost an organization dearly over time.

Read our eBook

Controlling Cloud Costs with Capacity Management

Learn more about extending capacity management to the cloud and how it differs from traditional on-premises capacity management.

Operating based on a holistic view of IT

Ultimately, the goal of capacity management is to ensure that IT resources are “right-sized” to an organization’s needs such that customers, internal users, and other stakeholders have a positive and productive digital experience. To achieve that, IT leaders must have clear visibility into resource usage patterns over time. It is not enough to simply get an alert whenever there is a critical issue, or when a pre-defined threshold is exceeded. Truly effective capacity management provides a holistic view of IT resources and helps technology leaders identify key trends and growth patterns such that the organization can take action long before a problem develops, instead of responding reactively.

Understanding patterns in computing workloads is also important. A one-time spike in traffic might simply be an anomaly, a one-time event that calls for additional resources but is unlikely to be repeated. In most cases, that situation might not call for any action to be taken. If, on the other hand, a spike in traffic can be associated with a broader pattern that is likely to recur over the course of time, it calls for a very different response.

It’s also important to understand each component of an IT infrastructure in its relation to the whole. Capacity management is closely intertwined with configuration management insofar as configuration changes can lead to more efficient use of existing resources. Simply adding memory or CPU capacity could be the answer to an underperforming system, but it can be difficult to monitor and analyze a diversified array of IT resources without some level of automation.

Some organizations rely on manual data dumps that are subsequently imported to Microsoft Excel, where they can be manipulated and analyzed. The problem with those kinds of processes is that they can rarely keep up with the pace of change. By the time information has been collected, exported, reformatted, and analyzed, it is often well out of date.

Capacity management for the cloud era

Effective capacity management in the era of cloud computing requires automated systems and processes that capture information from across the entire IT landscape, whether in-house or in the cloud. Those systems must enable IT leaders to develop a clear view of where they stand today, answering questions like “When will we saturate our current resources based on the current growth trends in our business?”, “How much storage do we need today, and how much will we need next year or in 2 years?”, and “Could we achieve greater cost-efficiency by moving to a different cloud vendor?”

An enterprise-grade capacity management toolset should include robust reporting capabilities, delivering reporting dashboards that help key stakeholders understand what is happening with their IT environment today, and what is likely to be needed in the future. That kind of reporting can be critical in developing a strong business case for new IT investments.

As cloud computing continues to grow, and as IT environments become more elastic, capacity management is becoming more important than ever. If your organization is striving to achieve more efficient results by reining in costs, Precisely can help.

To learn more about what it means to extend capacity management to the cloud and how it differs from traditional on-premises capacity management, download our ebook Controlling Cloud Costs with Capacity Management.