Categories
Consulting Managed Services

Keep Bills Grounded: Your Guide to Cloud Cost Optimization

Are you minimizing your cloud budget and maximizing your resources? Do you have the ability to review costs, both projects and historical? How efficient is your environment in the cloud?

If any of these questions leave you bewildered or simply uncertain, you’re going to have to learn how to manage your cloud costs. Cloud cost optimization on its own is a simple practice, the success of which is dependent on your data.

In this article, we will cover everything you need to know to get started with cloud cost optimization. So that you can ensure that you’re making the best of what you have, and working towards acquiring even more in the future.

Whenever you’re ready to start learning, get your notes out and keep reading.

Plan Project Requirements Before Cloud Cost Optimization

Before starting any cloud project, one must ensure that one plans properly. It’s even more true for projects that involve cloud cost consideration.

You should start by determining the key stakeholders, this includes the business teams that drive outcomes. It should also include the technical staff for the project. 

Bring everybody together and develop a film of transparency between all members. Teams involved must have visibility into the actions and decisions of other members.

Next, you should outline the technical and business requirements of the project. In regards to business requirements, you might want an API for parter discussion or a reporting dashboard for viewing financial activities. For technical requirements, you might want to develop an ability for users to identify themselves for access or to store relational data.

Any of those requirements will have a direct effect on the entire project cost. It will also influence how you go about selecting your services. After identifying the requirements, you should identify the workloads in scope with cloud service and the resources you will use.

This includes but is not limited to comparing and assessing service options to choose the best service for your requirements. When you have outlined all resources, requirements, and services, you can begin to approximate the costs.

Resource Organization As A Means to Enable Transparency

Another good idea to consider before pushing hard into cloud cost optimization is resource organization. You should have an organizational framework for attribution, control, and reporting of costs in the cloud environment. 

You can use your cloud provider’s “policy” to enable limits for tier and size of resources that can be deployed. For instance, you can prevent people from creating VMs on higher tiers that are more expensive. 

If you do find a need to enable VMs on those tiers, a request for this will be pulled through a funnel where each scenario is assessed and approved on a manual basis. These limitation policies will ensure that your organization does not meet expensive unexpected bills from users deploying resources that are greater than the need.

You can also allow users to review billing and reports by designing roles that allow them to get access to various services. Allowing users to review costs will allow them to see the impact of their decisions. It also pushes transparency concerning the costs of cloud resources in the organization.

Finally, you can organize your resources into subscriptions or groups. This will serve as a boundary for business units, projects, and services. You can also try using a policy to tag resources. 

The tags will be seen in billing reports, enabling you to account for the usage of resources by project, product, or business unit. Now let’s get into cloud cost optimization.

Find Unused Resources

The most simple way to start your cloud cost optimization process is to find unused resources. Often developers or admins might  a server to need perform a single function and simply forget to turn it off. 

In another scenario, an admin might forget to delete the storage that is attached to the instance they have terminated. This is quite common in many organizations. This results in significantly greater cloud bills that cover resources once purchased, but not in use.

A proper cloud cost optimization strategy should begin by finding the unattached and unused resources, consequently removing them.

Consolidate Idling Resources

Further on, you want to address any idling resources that you might have. An idling instance might have a very significant CPU utilization. When organizations get billed for the entire use of that instance, it’s a waste of money. 

You must identify these instances and consolidate all of your computing functions on fewer instances (as long as performance allows it). Back when data centers were prevalent on-site, admins wanted to ensure low utilization for headroom in high-traffic scenarios.

It’s inefficient, difficult, and expensive to add resources to a data center. But the cloud offers load balancing, autoscaling, and on-demand functionality that lets you scale at any time.

Right-Sizing

In the cloud world, right-sizing is a process of assessing services and changing them to the most appropriate size. It’s quite difficult to properly size an instance when you might have over 1 million combinations to select from. 

Besides the sizes, there are many options for database, computing and memory. But also graphics, throughput, storage capacity, and much more. Right-sizing software or tools can review your instances and suggest changes if necessary.

Not only does right-sizing reduce cloud costs, but it also optimizes your cloud. Which means you get to experience peak performance for the majority of the time.

Reserved Instances

Organizations that see themselves staying on the cloud for a long time should invest in reserved instances. First, they come with great discounts, variable by time commitment and initial payment.

Savings can go up to 75%, so you can see the potential. Since reserved instances can be acquired for several years, it’s important to prepare for the future and assess past usage.

If you don’t do that, you might find that you are actually paying more. And isn’t that the opposite of what we are trying to achieve?

Heatmaps

Heatmaps are not just great for websites, they can help with cloud cost optimization tools. A heatmap will display the valleys and peaks of your computing demand. 

This data is essential to designing start and stop times for cost reduction. For instance, the heatmap might show you can deployment can be shut down on holidays or weekends. 

While this is usually done manually, it’s just better to leverage automated opportunities to schedule start and stops.

Spot Instances 

Some people think spot instances are similar to reserves instances, but they are not. The only commonality they share is that they both help you shave costs.

Spot instances are auctioned and if they are priced properly, you can purchase them immediately. However, opportunities for SIs go by really fast. 

This means they are great for computing cases like jobs that can be disabled quickly or batch jobs temporarily. These types of jobs are common in large enterprises, so don’t think spot instances are bad.

Single vs Multi-Cloud

Some organizations specifically seek multi-cloud vendors to avoid lock-in. While this is an appropriate strategy for uptime and availability, the enterprise might lose out on volume discounts from single vendors. 

For instance, if your organization spends half a million on Azure and $200,000 on AWS. As well as $300,000 on Google Cloud Platform, you might miss out on a $1 million tier at a single vendor.

The value of this tier might be greater discounts and preferred status. Not to mention, the potential to save money with multi-cloud strategies can be significantly outweighed by the admin obstacles of switching platforms, training staff, and paying for network traffic.

Cloud Solutions Made Easy

Now that you know how to get started with cloud cost optimization. You are that much closer to making your cloud environment that much more efficient.

At first, it might seem that this optimization is hard to execute. But in reality, you might have noticed that it’s the smallest decisions that lead to the greatest of changes.

It shouldn’t take long to assess your instances for idle CPUs, especially if you have an IT department. It shouldn’t take long to decide to go with single or multi-cloud and it shouldn’t take long to set up heatmaps.

The hardest part of cloud cost optimization is developing a plan that can be executed by all the parties involved, not just a single individual.

If you’re interested in making your cloud solutions easier to manage or you’re having trouble with deciding on something, get in touch with us and we will happily accommodate all of your needs.