Cloud computing has taken over the IT world. Organizations are either migrating to cloud infrastructure or seriously considering it. And, it’s not hard to understand why this is the trend. With the cloud, you get higher availability, constant support, better flexibility, and scalability. However, the biggest reason the cloud has become so desirable for many organizations is how it helps cut costs. Traditionally, organizations used to maintain their own datacenters that housed expensive hardware, which needed to be maintained constantly. There was also a need for an administrator to ensure the equipment was technically sound. And, every few years, the hardware needed to be replaced with newer, more efficient equipment. All of this makes datacenters expensive to maintain. This is the reason organizations gravitate toward the cloud. The cloud helps you perform all the tasks as you would perform them at your own data centers without having to spend a fortune maintaining one. You can order resources and use them based on your specific requirements. Sounds great, right? However, with the cloud, things can go south fast if you don’t maintain the platform properly.
The challenge of cloud costs
The cloud is all fun and games till you get your first bill shock. This happens to various organizations that migrate to the cloud. Other organizations witness a constantly growing cost over the months. This happens because various organizations don’t understand the cloud-billing model. Cloud vendors like AWS, Microsoft Azure, and Google Cloud have competitive pricing to one-up each other and attract organizations looking to migrate. However, organizations need to go into it with better understanding and realize that the cloud is very different than local datacenters. With datacenters, most of the cost incurred is for capital expenses like labor and electricity used in running the equipment and having it up and running 24/7. Cloud resources, on the other hand, cannot be left running 24/7. Every resource you create incurs some cost every second or hour it is being used. This amount may seem insignificant when you look at the per-second or per-hour billing rate, but, then, the number of resources grows and over a month the seconds and minutes and hours add up. As you add more and more necessary resources — and sometimes unnecessary resources get created by employees — the costs keep adding up and. Then you get a bill that makes you rethink moving to the cloud in the first place.
Managing cloud costs
You can manage your cloud costs by making sure certain best practices are followed. Best practices will not only ensure financial benefit but also help you ensure better cloud performance and security. Let’s look at some effortless ways to cut your cloud computing costs.
1. Removing or stopping idle and unused instances
The most important thing to do to help you cut your cloud computing costs is finding unused resources. Users may create servers to run a certain function and forget to remove the instance once the work is done or forget to remove storage volumes for instances that have already been terminated. There can also be several resources that are barely used. All this contributes to your billing even if the resources aren’t being used. Organizations get billed for the entire instance even if they don’t use it that much. To eliminate this waste, you can automate the scheduling to stop and start services based on your specific needs. With AWS, for example, you can set up rules to stop or terminate instances based on CloudWatch alarms. You’ll still need to regularly review these rules to ensure they don’t terminate useful services and instances, but this is still far better than having to manually review each instance and decide whether to terminate or keep it.
2. Proactively monitor the cloud
Monitoring the cloud is necessary to ensure costs don’t go through the roof. The cloud is highly automated, but letting it be without constant monitoring can have consequences. New users can sometimes overlook the fact that everything in the cloud is metered and will ultimately be added to the bill. Overall monitoring can be made easier by creating alerts. Alerts are based on policies that users decide and they notify users of various events like:
- When the monthly spending crosses the decided budget.
- When you need to change the pricing plan for a particular instance based on its usage.
- When a resource has been idle for a specified period.
Organizations should also rely on autoscalers. Autoscalers are provided by public cloud vendors, however, you can choose a third-party autoscaler of your choice. Autoscalers analyze resource usage and recommend a better pricing plan.
3. Investing in reserved and spot instances
Another way to considerably lower your cloud costs is to invest in reserved or spot instances. After using the cloud for a couple of months, you can analyze your utilization and also calculate your average cost. Using this data, you can decide on a reserved instance provided by the vendor of your choice. Reserved instances can be purchased for a period of one to three years and are ideal for an organization committed to the cloud for the long term. Since you have to pay for these instances upfront, you get offered discounts that can help you save up to 75 percent of the cost. Even if the usage goes beyond the specified threshold, the cost incurred is bound to be much lower than that of on-demand services.
Spot instances are different from reserved instances. Spot instances are unused instances that are auctioned off to organizations. These instances can be acquired at a significantly lower cost (up to 90 percent off the regular cost) and can be used immediately. These instances, however, are only ideal for short-term use because the providers can take back the spot if they need the capacity. These instances can be used for batch jobs as they can easily be terminated.
4. Selectively migrate your apps
Every app works differently, so not every app is made for the cloud. An application that requires on-premises storage of data because of compliance regulations cannot be migrated to the cloud. Latency can also be an issue for applications that need real-time performance. Virtual resources may not be able to provide the kind of speed and reliability these apps need. For certain applications, hybrid infrastructure is a better option. When deciding on whether an application should be migrated to the cloud, you should analyze the application and its components to make an informed decision about what kind of cloud resources that application might need. The important thing, once you decide which applications you want to migrate, is to ensure a smooth flow of data between both the cloud and on-prem platforms.
5. Consolidate accounts
Organizations using different accounts to run services by public cloud providers should consider consolidating them to a single account. Various vendors offer volume-based discounts on their services. It’s easier to keep a track of the overall spending through a single bill rather than tracking down usage and cost for different accounts. AWS, for example, offers organizational units (OUs), which are a collection of multiple AWS accounts within an organization.
If yours is a large organization, and you’ve organized your accounts under an OU, the next step is to build a good relationship with your cloud account manager. This can give you an inside edge to negotiate on pricing. Account managers can also help you look for opportunities to reduce costs based on their experience managing other similar accounts.
Keeping cloud costs from getting out of control
The cloud remains a popular and appealing platform. However, cloud costs need to be optimized at every step of the way. Organizations migrating to the cloud should evaluate their workloads and make sure they choose the right vendor and pricing model. Once the migration is done, organizations should ensure that users follow best practices. Good governance and automation also help cut costs significantly. A helpful account manager can make a world of a difference with costs. Yes, the cloud is great and you should try it if you haven’t already. However, the cost can easily get out of hand and you need to make constant efforts to make sure you don’t become a victim of cloud waste.
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