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Cloud Cost Optimization – How to Manage Cloud Cost Effectively


Cloud computing has changed the way we build and deploy applications. As cloud computing models have begun to proliferate and evolve, it’s critical that technology leaders start making informed decisions about which cloud services, platforms and payment models deliver the best results. When businesses are trying to start their cloud adoption journey, they often miss out on setting up a framework for the cloud cost management. This usually results in an uncontrolled proliferation of an organization’s cloud instances, services or providers, which eventually leads to high cloud costs. Hence, you need to address some of the common challenges when contemplating on cloud cost optimization.

Key Challenges of Cloud Cost Optimization

The cloud cost optimization process is a journey and needs to continue throughout the product lifecycle as per the demand and requirement and also, as the IT services evolve with the technological innovations. There are several challenges one might face while optimizing their cloud cost.

Here’s a snapshot of one of our recent LinkedIn poll results:

Cloud Cost Poll

Based on our experience of working on several cloud projects, we have been listed below some of the key challenges businesses often face while optimizing their cloud costs:

  • Everything is metered when businesses are running on cloud and you need to assess the cloud spend.
  • There is a lack of visibility which leads to various application and network performance issues, including the inability to deliver against service agreements. This can have direct cost implications.
  • It is an arduous task to keep a track of the cost wastage due to over-configuration, non-usage or idle assets.
  • Improper provisioning i.e. the allocation and management of cloud resources by the cloud provider to its clients can be a threat. Organizations should be able to anticipate how many resources they will require.
  • There is an accumulation of outdated data like reports and log files.
  • Budget forecasting is complex. It requires setting up process and workflows, deep expertise, and the right data.
  • Imperfect architecture design leads to applications that are poorly designed for cloud-based platforms. Therefore, you fail to deliver the true value of the cloud platform.
  • Misaligned approach among the teams or departments proves to be an obstacle that can make or break your cloud cost optimization efforts.

Once these challenges have been solved, organizations can obtain a right-sized, efficient, optimized and elastic cloud solution in place.

Cloud Cost Optimization Techniques – The Best Practices

In case of cloud computing, you require a careful and efficient approach for continuous monitoring and analysis. This ensures your spend stays optimal and that you’re getting the most out of your cloud resources. Here are some of the most effective ways to optimize your expenditure over the cloud and a few best practices for managing the infrastructure efficiently:

  • A cloud cost optimization strategy should start by identifying unused and completely unattached resources and removing them. Optimization of costs through automation helps majorly in cloud cost optimizing.
  • Identify, address and consolidate idle resources. Right size the computing services which will enable you to analyze and modify them to the most efficient size.
  • Enterprises committed to the cloud for the long-term should invest in AWS Reserved Instances (RIs) or Azure Reserved VM Instances (RIs). Managing the cost variables like Reserved Instances (RIs), upfront payment and storage types are critical for successful IT, DevOps, Security, and Finance teams.
  • Take advantage of Spot Instances as they can help you save more on your AWS spend or Azure spend.
  • Heatmaps are important mechanisms for cloud cost optimization.
  • Minimize data transfer costs. Make sure your object storage and compute services are in the same region because data transfer is free in the same region. Cost on API access can be reduced by using batch objects and avoiding a large number of small files.
  • Use auto-scaling to reduce costs during off hours. Design workloads for scalability and Cache storage strategically. You can switch off resources that are used for non-production workloads by analyzing idle resources.
  • There is a need to improve the process of continuous visibility and tracking of unused assets and occurrences of overspending. It is of utmost importance to choose the right type of instances for your requirement, offered by the cloud service provider, before deploying your service.
  • Deploying popular containers like Kubernetes and Docker offer various benefits such as efficiency, simplicity, maintainability, portability and multi-cloud platforms.
  • Using serverless computing services, such as AWS Lambda, take away the need for developers or other IT staff to configure or manage cloud instances. That saves a lot of time, which in turn, reduces operating expenses.

Cloud cost optimization can be achieved by planning your cloud resource utilization, smart selection of cloud features, optimizing cloud performance along with following the practices that are mentioned above. In addition to these, it is important to partner with the right managed service provider who can further contribute to the significant cloud cost savings.

Cloud Optimization Use Cases

When you are just starting your migration journey to the cloud, AWS has a set of solutions that help you to manage and optimize your spend. The solutions include services, AWS cost optimization tools, and resources to organize and track cost and usage data. AWS cost optimization helps you to enhance control through consolidated billing and access permission. Cost optimization in AWS enable better planning through budgeting and forecasts, which leads to further lowering of cost and cloud spend optimization.

Microsoft Azure helps you to manage your cloud spending and focus on what matters most to your business. With Azure cost optimization, you are able to find the underutilized resources with Azure Advisor and get recommendations on how to reduce your spend – whether to reconfigure or consolidate them. You can monitor your organization’s cloud spending with Azure Cost Management.

Google cloud cost optimization helps customers to manage their cloud operating expenses and right size their cloud costs according to the needs of the business. Google cloud provides a robust set of no-cost billing and cost management tools which provide you with the visibility and insight that you require for your cloud deployment.

On-demand cloud provides quick wins in any cost-savings initiative. You’ll start saving right after eliminating idle resources or downsizing resources. Getting your cloud cost optimization tools and practices in place help to ensure ongoing efficiencies as cloud use accelerates even faster in an ever-changing and a dynamic market. Optimizing cloud costs proves to be a digital imperative and cloud spend optimization ensure that certain infrastructure do not hit cost thresholds.

Importance of Cloud Cost Optimization

No matter where companies are in their cloud journey, cloud cost optimization continues to be a critical and top-rated concern. As organizations move more and more workloads to the cloud, it’s easier to lose sight of the big picture and the associated costs. Adoption of cloud services offers powerful agility benefits but without a concrete plan for managing cloud costs, they can quickly spiral out of control. Hence, it is essential to optimize cost in order to maximize return on investment (ROI) and reduce total cost of ownership (TCO). Businesses and IT leaders are now focusing on optimizing their cloud spends in order to leverage cloud services, increase ROI and put their business in the best shape.

Want to optimize your cloud cost? Let us show you how – at no cost to you!

Nairita Goswami
Assistant Manager – Marketing, RapidValue

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