Shifting workloads to the cloud can boost the flexibility, efficiency and security of your IT operations. It also has the potential to be more cost-effective than a traditional IT infrastructure because the cloud is an operating cost, rather than a large, up-front capital expenditure.
But achieving cost efficiencies in the cloud isn’t guaranteed. You need to plan and prepare carefully for your transition to make sure you don’t get hit with unexpected costs. In our recent Cloud Impact Study, part 3, we note that 57% of organizations actually experience higher than expected costs in the cloud, while 35% admitted they’re wasting IT dollars due to inefficient cloud platform usage.
If you are having trouble optimizing your cloud costs, there are steps you can take to make more efficient use of your IT budget. Here are a few:
- Get better visibility into your data. In the cloud, it’s best to use a configuration that gives you the day-to-day performance you need without any overhead. Otherwise, you may be buying resources you don’t actually use.
Getting better data visibility requires tools that allow you to monitor and control your costs in real time. You also need to carefully assess your applications and workloads. Some will be permanent and others temporary. Some applications will already be stable, while others will be in flux.
For example, if you are evaluating a new application but haven’t established what its performance will be when it’s stable, you don’t want to commit to a multi-year term for cloud resources that could wind up sitting idle.
- Review under-utilized resources. Many businesses use tools to track their cloud costs, but they don’t look at the tools until a problem occurs. By that point, the problem may be hard to fix.
Instead, you should use cost analysis tools proactively to search out under-utilized resources. This makes it simpler for you to see if your cloud infrastructure is over-provisioned and, if it is, take steps to right-size it for an immediate cost savings.
Cloud providers offer an assortment of native tools which can help you make the most efficient use of your cloud resources. For example, Azure Advisor helps monitor cloud performance and flag under-utilized or over-utilized virtual machines. And AWS Cost Explorer shows your spending patterns over time as well as your use of reserved instances. This allows you to make sure you’re only spending for resources that you’re actually using.
- Use reserved or spot instances (but only where it makes sense). Cloud providers offer reserved or spot instances at a discount to their regular on-demand pricing models. In some cases, these can save you a significant amount of money, but there are potential drawbacks.
Reserved instances require you to prepay for capacity over a set time, usually one or three years, to obtain discounted pricing. But using these instances requires careful planning. Even if you’re getting a significant discount, if you reserve 500 hours a month and use only 50, you’re going to be paying more than you should.
Unlike reserved instances, spot instances don’t require you to prepay or commit to a term. They’re offered by cloud providers that have excess capacity, and they allow you to take advantage of significant discounts. The catch is that cloud providers stop offering spot instances as soon as their excess capacity is used up, so they are best used for test/dev environments or containerized workloads.
More steps to control cloud costs
These are many more steps you can take to optimize your costs in the cloud. The key is to consider all the pieces of your overall architecture. A cloud service provider with expertise in hybrid- and multi-cloud environments can help you chart a cost optimization plan to take full advantage of everything the cloud has to offer without incurring unexpected costs.
You can learn much more about cloud cost-saving tips. Download our eBook – 9 Steps to Controlling Cost in the Cloud.