cloud cost optimization

Cloud Cost Optimization: 6 Best Practices for Cloud Cost Optimization

The trend of enterprises moving their storage and computing requirements to the cloud has consistently maintained an upward trajectory in recent years. With multi-cloud deployments becoming the new normal, migrating from on-premise solutions. The concept of the cloud came with the promise of lower IT costs and unlimited storage. Businesses were told that they would only be charged for the resources they use. As the system matured, a gaping loophole in the system started becoming more and more apparent – service providers charged the customers for the resources ordered and not resources used. This conundrum of resources used vis-à-vis resources ordered opens up a possibility of cloud cost optimization to free up more working capital.

Let’s try to decode what cloud cost optimization means and how you can leverage it to reduce investment in IT storage and computing needs.

What is Cloud Cost Optimization?

Simply put, cloud cost optimization is a strategy for trimming costs for cloud technology usage, ensuring that you truly pay for only what you use. This approach relies on enterprises’ understanding of cloud technology needs and pricing systems to look for a way to optimize the usage and efficiency of cloud services, most cost-effectively.

This becomes imperative as the cloud infrastructure matures and becomes more complex in its structure. These complexities – multi-cloud deployment, for instance – can make costs more opaque and harder to track. When you can’t monitor and manage usage appropriately, you run the risk of costs spiraling out of control.

Cloud costs today may be determined by a lot of variables – virtual machine instances, network traffic, software licenses, training and support, web services, storage, and memory, to name a few. These variables may not be included in the upfront cost, which can contribute to a surge in your cloud cost.

Besides, cloud operations and the ensuing costs – are essentially fluid in nature and often managed in a decentralized manner, which makes tracking expenses more complex.

It is, therefore, crucial for enterprises to chart out a cloud cost optimization strategy that takes all these factors into account to get the most out of the infrastructure in place at minimal costs.

6 Best Practices and Strategies for Cloud Cost Optimization

The aim of a robust cloud cost optimization strategy should be to reduce overall spending by eliminating waste, leveraging high discounts, identifying mismanaged resources, and right-sizing services to scale.

Here are the 6 best practices to achieve optimal outcomes:

1. Identify Unused Resources

One of the easiest ways to effectively optimize cloud costs is by identifying unused resources. Spinning up a temporary server for a single-use operation and forgetting to turn it off later or not removing storage associated with terminated instances are common use case anomalies that contribute to an increase in cloud costs. In these cases, an enterprise is footing the bill for resources that are no longer in use. Identifying such resources and removing them is a good starting point for cloud cost optimization that every organization can benefit from.

Also Read About: Cloud Cost Management

2. Merge Idle Resources

A resource that is lying idle but is being charged for by the service provider is a significant waste that needs to be plugged for cost optimization. For instance, let’s say your CPU utilization for current operations is 5 or 10 % of what you have availed, but you are being charged for 100%. It’s a classic case of computing resources being wasted. You must work to zero-in on all such resources in your system and merge these to cut costs. If scaling up operations during a busy season or in the event of a spike in traffic is the reason why you are bearing the extra costs, it is time to leverage cloud features such as auto-scaling, on-demand capabilities and load balancing to scale up computing capcity any time.

3. Leverage Heatmaps

As visual tools that show valleys and peaks in your computing demand, heatmaps are vital for achieving cloud cost optimization. The insights offered by a heatmap can be a valuable asset in putting in place – start and stop cut-offs for different resources to reduce costs. For instance, you can use these to identify a time when certain resources are practically lying unused and shut them down for that duration of time. What’s more – the start and stop schedules for different instances can be automated, which means you eliminate the elements of error associated with performing these tasks manually and optimize costs to the maximum.

4. Rightsizing the Resources

Rightsizing refers to an analysis of computing services to identify the most efficient size for your operational requirement. With the correct Right-Sizing tools, you can optimize not just the size of your server but also other elements such as database, memory, storage capacity, and graphics, among others. Besides helping with cost reduction, this approach also helps in cloud optimization that facilitates peak performance of the resources you pay for.

5. Invest in Reserved Instances

Enterprises that seek to embrace the cloud for the long haul can improve on costs by investing in Reserved Instances (RIs). These are lucrative discounts offered based on time commitment and upfront payment. Your saving through the right RI adoption can be up to 75%, which makes it a valuable cog in your cloud cost optimization plan. However, to make sure that you are getting the most bang for your buck through RIs, it is important to base your future demand on a thorough analysis of your past usage patterns.

6. Make Use of Spot Instances

Spot Instances, which are available for auction, can be a smart way to cut back on your cloud spending. Once purchased, these are for immediate use. However, the window for making the bid is usually small, so you have to be on the lookout consistently and move swiftly if the price is right. These are best suited for short-term projects or jobs that can be completed quickly, as they may come with limited validity. Given that most large organizations have such jobs going almost at all times, these can prove to be a valuable component of any cloud cost optimization strategy.

Cloud Cost Optimization – Need of the Hour

As cloud spending continues to increase, operating without insight and proper planning can have serious financial repercussions. That said, the cloud holds great potential for improving business operations, as long as attention is paid to cost optimization to eliminate unexpected spikes, overpaying, or inadequate performance.

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