Moving to the cloud offers many benefits. For instance, you can access enterprise-grade infrastructure without incurring heavy capital costs. You’ll also have the flexibility to pay for just what you use, and this can help you stay within your budget. In many ways, cloud migration opens new opportunities for small and medium-sized companies that can’t afford advanced IT infrastructure. That said, cloud costs can quickly add up, so you’ll have to implement cloud cost optimization.
In fact, overspending beyond your established budget is a very common problem today. Here’s an infographic from TechTarget that shows the gravity of this problem.
Shown above is one part of the infographic. You clearly see how rapidly cloud spending is growing. To help you steer away from overspending, I’ll provide some tools and strategies you can use. Before that, let’s briefly look at what cloud cost optimization is.
What Is Cloud Cost Optimization?
Cloud cost optimization is the different strategies and methods an organization uses to reduce its cloud costs. This definition encompasses every small and big step that you take to bring down cloud spending. Let’s take a look at some cloud-cost optimization strategies you can implement in your organization.
Cloud Cost Optimization Strategies
Cloud cost optimization should be an ongoing activity within your organization. Always start with a goal. Measure how much you’re spending now and what is an optimal cloud spend for you. Often, to achieve this objective, you may need more than one action or activity that spans design and maintenance. More importantly, you need an evaluation strategy that regularly assesses the performance of your strategies. This ensures that you’re on the right track toward your cloud cost optimization goals.
Here are 7 strategies you can leverage to lower your cloud costs:
1. Auto-Scaling
The cloud is scalable. As a result, you can use more resources during peak performance times. You can also reduce these resources during slower business times. As an organization, you should leverage auto-scaling for an optimal cloud spend. Always stay on top of your business needs and see if they match your cloud usage. Furthermore, consider using historical reports to compare the trends of your business growth and cloud usage to get insights. Accordingly, make any necessary changes.
Note that this may require some changes to the cloud infrastructure and design to match your spending goals. You can rearrange server pools, computing power, and cloud architecture to meet your requirements.
2. Forecasting and Budgeting
Forecasting and budgeting are strategies you’d associate with a data center. In reality, they work for the cloud, too. When you forecast your needs for a specific period, say a quarter, you can establish the baselines for this period. Based on these forecasts, you can then budget your cloud assets. That’ll help you to plan better and stay within your established budget.
3. Training
Planning is one thing, but executing the plan is what ultimately makes it a success. For this, you need people who know what they’re doing. Provide the necessary training for the employees who interact with cloud resources, so they know how to best optimize their use. Share accountability across teams and empower people with the right tools, such as CloudWatch and Virtana Optimize. Give everyone the knowledge to optimize cloud spend.
4. Analyzing the Billing
All cloud service vendors provide detailed and itemized billing for their services. Make sure to analyze this billing to understand which services cost more than others. Armed with this information, you can understand high-priority resources, such as workstations and virtual machines. After this, you can compare them against your budgets. Based on this comparison, you can better decide how to reduce cloud costs without impacting productivity.
5. Identifying Unused Resources
You can combine different reports to identify unused resources, such as page blobs or disks attached to deleted virtual machines. Then, you’ll stop them from getting billed. Additionally, you can also identify the department/team with which these unused resources associate, and work with them for better optimization.
6. Shutting Down During Off-Hours
One option is to shut down some cloud resources during off-hours, especially the ones that aren’t used often. This will help you bring down your costs immensely. On the flip side, it could affect your productivity levels. Ideally, you should strike a balance between costs and productivity. To do that, start with a list of resources and their usage levels. After that, you can determine the pattern of usage, and accordingly, decide when you want to shut down certain resources.
7. Automating
Automating a part of your cloud operations, or the tasks that use cloud resources can also bring down your costs. Two types of automation can help. The first is event-driven, where certain operations or tasks are a reaction to other events. The second type of automation relates to batch operations. Based on your budget and resource usage, you can pair these types together. Automation can speed up processes and reduce the need for additional employees. In turn, it helps you cut your cloud spending.
These strategies are sure to help bring down your organization’s cloud costs, but you may need the appropriate tools to implement them. That’s exactly what I’ll discuss next, so you can decide which tools to use to manage your cloud spend.
Cloud Cost Optimization Tools
Many tools are available today to help manage your cloud spending. Leading cloud providers, such as Azure and AWS, even have their own native tools for managing cloud costs. Here are 3 popular choices:
1. CloudWatch
CloudWatch is AWS’ native tool for calculating your cloud spend. It gathers data from the entire AWS infrastructure in real-time. Using this data, it generates reports that display in-depth costs, usage, optimization percentages, and more.
Further, you can also gather custom metrics for your forecasting and budgeting purposes. A central dashboard displays all the information you need, and you can access this information at any time.
2. Azure Cost Management + Billing
This tool is similar to CloudWatch, but it comes from Azure. It’s also a native tool that provides a detailed analysis of cloud costs, forecasts, usage, and other pertinent information. More importantly, this tool gives you a set of optimization recommendations based on your usage patterns. You can combine these recommendations with your forecasting to come up with a clear strategy for cutting down your cloud costs.
3. Virtana Optimize
Virtana Optimize is a cloud optimization platform that gathers data across all the cloud services you use. It then analyzes this data to provide insights on sizing, utilization, wasted resources, idle time, and more. Based on this analysis, Virtana Optimize generates a set of custom recommendations that you can use to bring down your cloud costs.
Now that you have an idea of some popular cloud cost optimization tools, the next big question is how can you choose a strategy to best optimize your cloud usage? Let’s find out.
Choosing the Appropriate Cloud Cost Optimization Strategies and Tools
So far, I’ve covered many different cloud cost optimization strategies and some tools you can use. However, different organizations will end up using different strategies and tools. Before choosing yours, you should analyze your company’s needs. Again, this isn’t an easy choice given the many options you have. To help you, here are some important factors you should consider when pursuing cloud cost optimization.
Budgets
One of the defining factors is the budget itself. How much money can you spend to optimize your cloud usage? Accordingly, pick a tool that can provide the data and insights on your cloud usage, so you can keep your costs within your budget. Not all tools are the same, so conduct thorough research to find a tool with the best features for your budget.
Cloud Platforms
Another important factor is your cloud infrastructure itself. If you’ve spread your assets across multiple cloud platforms, you’d want a tool that can gather information from these different platforms.
On the other hand, if you have a single platform, the associated native tool should suffice. For example, if you use the AWS platform, you can use the CloudNative tool. The same is true for all single-cloud platforms that have their respective native optimization tools.
Cloud Usage Patterns
How does your organization use cloud resources? Do you have cloud cost centers where you track all of your cloud expenses? Are individual teams or departments responsible for managing their budgets? Answering these questions can lead to successful strategy implementation. For example, if you have centralized cloud cost areas, then a single license should do. Have a look at your usage patterns and implement a strategy and tool combination accordingly.
Specific Feature Requirements
If you have any specific feature requirements such as automatic recommendations, spending forecasts, or capacity planning, go for a tool that provides them. Again, you can only know this if you analyze your needs.
In all, you can’t have a one-size-fits-all solution. The choice of cloud cost optimization tool and strategy depends to a large extent on your financial goals, organizational setup, cloud usage patterns, and more. I hope this was an interesting read for you. Let’s end with a quick recap.
Final Words
To conclude, the cloud offers many benefits to an organization. At the same time, the costs quickly add up, especially if you use many cloud services and apps. Implementing the right cloud cost optimization strategy and tool can really help.
You can consider several strategies and tools to keep your cloud costs in check. I discussed these in the article, so feel free to refer back to them in the future.
Lastly, you also have some factors to consider when choosing the right combination of strategies and tools. Factors such as your budget and cloud usage patterns are important to analyze before starting your journey on cloud cost optimization.
Do you have any more questions about cloud cost optimization? Check out the FAQ and Resources sections below!
FAQ
What are AWS’ four pillars of cloud optimization?
AWS suggests four pillars to optimize the cloud. They are: choosing the right size, staying on top of reserved instances, leveraging the power of elasticity, and monitoring the usage at all times. These pillars optimize your costs without affecting overall productivity or efficiency. These strategies can also bring down the Total Cost of Ownership (TCO) of your cloud assets.
Can I reduce my cloud spending?
Yes, you can use many strategies and third-party tools, such as CloudWatch and Virtana Optimize, to lower your cloud spending without affecting productivity or performance. Start with a realistic budget and choose the strategies and tools that can help you get there.
Why do I have to optimize my cloud costs?
Business leaders strive to create a balance between spending and growth. They tend to use the available resources to achieve both, and this requires cost optimization at all levels. This is more pertinent in the cloud, as costs quickly add up due to the pay-per-use model.
Are cloud cost reduction and cloud cost optimization different?
Yes, they’re two different things but closely related. Cloud cost reduction is the process of reducing the amount of money you spend on cloud services. On the other hand, cloud cost optimization is the process of striving to get more value from the money you spend and avoiding wasteful expenditure.
Are cloud-native optimization tools effective?
Yes, many leading cloud service providers, such as AWS, Azure, and GCP, offer native cloud optimization tools. These tools add value to your business by channeling your money in the right avenue. They’ll offer you optimization suggestions and/or recommendations based on your usage patterns.
Resources
TechGenix: Newsletters
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TechGenix: Article on Reducing Your Cloud Costs
Learn the different ways of reducing your cloud costs.
TechGenix: Article on Spot Instances and Their Impact on Cloud Costs
Understand what spot instances are and how they can affect your cloud costs.
TechGenix: Article on Tools That Help with Cloud Costs
Learn more about the startups that have the tools to help lower your cloud costs.
TechGenix: Real-World Case Studies on Cloud Cost Optimization
Understand how three companies managed to optimize their cloud costs.
TechGenix: Article on Tweaks to Lower Cloud Costs
Learn some tweaks you can apply to lower your cloud costs.
