Most tech-driven organizations globally have now reached a decent stage of cloud maturity. They are leveraging a robust suite of cloud tools and apps to run their business and expect the cloud adoption to result in substantial savings in operational costs.
But yet, many end up with massive cloud bills, often with little or no idea of what led to those high costs.
Yes, it is a known fact that cloud helps in bringing down CapEx to almost nil and keeps OpEx consistent and predictable. But it’s not without some effort from organizations themselves. Although there are many ways in which you can leverage the cost benefits of cloud, in addition to its availability, flexibility, and scalability benefits, there is a dire need for driving cloud cost optimization.
So, what is cloud cost optimization? Why do organizations need cloud cost optimization? What are the benefits? And what best practices can a cloud partner help embrace?
What is cloud cost optimization?
Cloud spending is expected to reach 47% of enterprise technology budgets in 2022. Yet, many organizations face difficulty in forecasting future cloud needs, leading to overspending.
Although cloud offers flexibility, responsiveness, and scalability benefits, this accelerated adoption is quickly escalating into a cost crisis. Despite the expectation (and assumption) of low IT bills at the end of the month, many find that their expenses have surpassed their earlier bills – for reasons unbeknownst to them.
Unlike on-premises systems where budget predictions and projections were pretty straightforward, in cloud environments, the lack of a fixed capacity ceiling makes spending difficult to control and budgets tougher to restrict.
Cloud cost optimization is the practice of constantly monitoring cloud usage with the aim of keeping monthly costs as low as possible. Through effective and continuous assessment and evaluation of tracking usage, cloud cost optimization enables organizations to understand and manage their snowballing cloud bills and unearth effective ways to maximize efficiency and minimize costs.
Why do organizations need cloud cost optimization?
The ease of accessing resources on demand along with the ease of spinning up new instances to meet the individual, team, or department goals is often the perfect recipe for overspending. Because cloud enables even everyday users to spin up unlimited cloud clusters in a jiffy, the cloud costs that rack up in a month are humongous!
Cloud cost optimization is required to contradict the very purpose of cloud: to optimize, and eventually minimize operational expenditure.
Organizations need cloud cost optimization to:
- Identify over-used or underused, or mismanaged resources
- Eliminate waste and reduce unnecessary costs
- Ensure cloud resources can scale without issues
- Improve IT efficiency and performance
- Optimize budgets and ensure maximum ROI from cloud spend
- Keep an eye on how cloud resources are being used and managed
What are the benefits?
Cloud cost optimization aids organizations in becoming more efficient with their cloud usage and spending, while driving the required ROI and leveraging cloud capabilities to the fullest.
Listed below are five important benefits of cloud cost optimization:
- Streamline costs: One of the biggest benefits of effective cloud cost optimization is streamlined costs. Through the use of modern tools and practices, organizations can get a better understanding of cloud adoption, track usage, and reduce or right-size instances, to keep costs to a minimum.
- Improve efficiency: Cloud cost optimization helps organizations strike the right balance between utilization and cost, promoting business efficiency and resilience. With the use of just the number of cloud instances needed, it aids in rationalizing the performance of the business as a whole.
- Enhance productivity: Since cloud cost optimization helps in removing or right-sizing unused resources, it offers a great way to disseminate costs while also promoting the overall productivity of business infrastructure.
- Enable visibility: Cloud cost optimization also helps IT leaders in having the required visibility into cloud adoption across the business. From which teams are using which cloud tools to what tactics they can implement to optimize usage, reduce costs, and overcome bottlenecks – such effective monitoring can result in substantial savings in cloud expenditure.
- Minimize unnecessary provisioning: Although rapid scalability is one of cloud’s major strengths, effective cloud cost optimization ensures careful and optimum provisioning of cloud resources – just enough to meet business needs.
For organizations embracing cloud to accelerate their digital transformation efforts, embracing top cloud cost optimization tips and best practices can aid organizations in effectively managing and optimizing their cloud bill.
Here are the different things you can do to contain your cloud costs:
Leverage built-in optimization technologies: Most of the cloud platforms offer built-in optimization tools. The platform-specific tools are designed to operate within the existing infrastructure, so they are tailor-made and specific for that infrastructure. Also, since these optimization technologies are built-in, there is no extra cost for organizations. As a first step, it is always recommended to start using these tools.
Continuous monitoring of idle and unattached resources: Constantly reviewing and assessing your cloud resources is a great way to control cloud bills. Most cloud vendors continue to charge for resources despite being idle. Such monitoring helps you identify idle and unattached resources. It also enables you to devise strategies that help in getting rid of them in time, so you can reduce spending and improve your bottom line.
- Right-sizing instances: Right-sizing cloud instances is another great way of leveraging enough resources to achieve sufficient performance at the lowest cost possible. Touted as one of the best ways to optimize cloud costs, the proper approach to right-sizing can aid in matching instance types and sizes to workload performance and capacity requirements – without compromising on capacity or other requirements.
- Using reserved instances: Using reserved instances can enable significant savings in overall cloud expenditure via sufficient capacity reservation within specific availability zones. With reserved instances, you can maintain flexibility in how you use your cloud resources. You can also confidently launch the number of instances you have reserved when you need them.
- Automating load balancing: Automating the process of load balancing is another way to optimize cloud costs. Using automated tools, you can distribute traffic across multiple instances of your cloud applications, ensuring optimal efficiency of your cloud instances while also reducing the risk of performance issues.
- Estimating future requirements: Another great way to optimize your cloud bills is to be aware of what your upcoming cloud needs are. Estimating future requirements can provide you with a good idea of how your cloud expenditure is likely to shape up, so you can accordingly budget your cloud costs.
- Implementing governance policies: Having the right governance policies in place is yet another way of effectively running services in the cloud. Such policies can help in managing risk and enhancing cloud security. They can also enable the smooth operation of your cloud infrastructure while ensuring a robust framework is in place for accessing cloud resources.
How Enreap can help
As a global organization that provides a range of modern and innovative cloud-based solutions, Enreap can empower you with the right tools and techniques for effective cloud cost optimization. Partnering with us can enable you to effectively manage cloud workloads, streamline usage, and optimize costs in the long run. We can help you embrace techniques to assess your cloud architecture, identify idle or unused resources, estimate future cloud requirements, and also implement the right controls to avoid overspend – all while allowing you to get maximum value from the cloud.
As organizations across the world succumb to the pressure to digitally transform themselves, several efforts are being made towards adopting cloud as a driver for better enterprise collaboration, unification, and visibility – to enhance data insights, operational efficiency, and customer interactions. But any cloud platform, despite the many benefits it delivers, also needs to be continuously monitored, so you don’t end up with humongous cloud bills at the end of each month. To avoid unmanageable and uncontrollable cloud bills, you need to embrace several cloud cost optimization strategies to minimize current cloud expenditure as well as control costs in the long run.