Cloud Computing Cost Savings | Optimization Tips

November 12, 2019

Saving money or optimizing budgetary spends over time are two of the main reasons for moving workloads to the cloud. When used properly, cloud infrastructure can reduce total cost of ownership, as compared to an on-premises infrastructure.  

This does not mean that simply migrating applications and data to the cloud will necessarily result in cost savings. Rather, optimizing costs in the cloud and keeping your cloud computing costs predictable depends on your ability to make smart decisions about exactly how and where you host workloads. Here are some considerations for businesses, when looking for savings in the cloud.

Right-sizing for effectiveness
Simply put, right-sizing means achieving your best-fit cloud configuration, including optimal compute, storage, network settings and pricing.

If the provisioning of your cloud resources is accurate and they match your usage, you can achieve maximum performance, at the lowest possible cost. Often, traditional on-premises infrastructures are over-provisioned and not fully optimized.

A move to the cloud allows you to buy what you need, when you need it, and provision more as you go along.

Leveraging Reserved Instances
Reserved instances (RI) provide Companies with a significant discount compared to on-demand instance pricing.  It allows them to choose their payment option, terms, instance type, scope, tenancy and platform that best suits their need. 

To make sure instances are the right size, Companies must be application aware, and have an understanding of their performance requirements and resource utilization. Failing to understand these factors can lead to over-provisioning and cost over-runs. 

Increasing Elasticity
Elasticity is when a system adapts to workload changes by automatically provisioning and de-provisioning resources to match current demands.

In other words, elasticity means you should use services when you need them, and have the option to turn them off when you do not. The major cloud providers are great examples of cloud elasticity. While each platform takes a slightly different approach, they all provide services that are able to flexibly scale at a much lower cost than a dedicated equivalent platform. Moreover, they do so behind the scenes with no intervention needed by the consumer of those resources.

Cost optimization governance | Measure. Monitor. Improve 
Increasingly, cloud users are concerned about the money they might be wasting in their public cloud spending, however only a small percent of companies are actually doing something about it.

To ensure organizations extract the full potential of the cloud, they need to constantly measure, monitor, and improve. Creating a culture of transparency and accountability is vital when optimizing cloud deployment. Companies must define and enforce cost allocation tagging; define metrics, set targets, and review at a reasonable cadence.

A cost-conscious cloud philosophy does not come about on its own. Altering processes and behaviors takes time and determination. Clear policies around cost ownership, deployment processes, reporting, and other best practices should be established and evangelized across your organization. Training can help staff recognize how cloud costs work and steps they can take to eliminate surplus.

Want help understanding how you can optimize your costs in the cloud? Send us a note


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