The uptake of cloud infrastructure is on an upward trajectory, with good reason. It is cost-effective, secure, flexible, scalable, and allows quick information access. Further, the on-demand pricing structure means users only pay for the resources they use. 

But, the reality is that cloud spending can rise significantly due to ineffective implementation of resources. An analysis of cloud costs shows that underutilization, over-provisioning, and applying for unnecessary capacity are some reasons for the considerable spending. 

Knowing where to cut or reduce unnecessary costs is critical for effective cloud optimization. That is what we aim to share in this informative article.  

Cloud Cost Management Requires Rightsizing Computing Resources

A critical first step is to carry out a cloud cost analysis. That will give insights into the costs associated with the cloud infrastructure. 

An audit of the existing cloud infrastructure may reveal some startling insight. One of the most significant is how many computing resources are running idle. That happens when users apply for incorrect instance sizes. 

Over-provisioning of resources will only drive up cloud computing costs. At the other end is under-provisioning, which will lead to performance failures. 

Cloud cost forecasting requires monitoring resource usage and establishing measurable performance metrics. The aim is to achieve the correct cost vs. performance balance. 

Keep Up With Regular Performance Analysis 

The strength of cloud computing lies in pay-on-demand or pay-as-you-go pricing. This is unlike other models that have fixed pricing. But many users need to realize that the former comes with challenges. 

With fixed pricing, you get a specific amount of resources, and as long as you do not exhaust them, there will be no impact on pricing. But with dynamic pricing, what you use determines what you pay. So, leaving cloud resources running, even when not in use, will drive up the final cost. It is vital to take note of idle and peak times and ensure everyone logs off if they are not using the system. 

An effective cloud cost reduction strategy is to keep up with regular performance analysis. Users must identify and configure their reporting tools for end-user performance. That way, it becomes easier to get a handle on cloud usage.  

Look For Cheaper Cloud Alternatives

An excellent cloud cost reduction strategy is to become a savvy shopper. Look out for discounts or special pricing models as offered by the service providers, such as:

  • Reserved instances allow users to commit a specific amount of resources upfront over a particular period. Examples include Amazon EC2 reserved instances, Google Cloud Committed Use Program, and Azure Reserved VM instances. Signing up for this option will work for users with predictable and consistent capacity needs.
  •  Spot instances allow users to get discounted prices for unutilized resources from the service providers. A comparison would be a cruise ship selling unoccupied spots for a lower price at the last minute. But spot instances do have their challenges. Access to resources only depends on availability. If a current customer needs and is willing to pay for the resources, those enjoying the provision will lose out. That makes spot instances unsuitable for those needing consistent resources. 
  • Saving plans allow users to commit to on-demand instances within a specific period, typically one to three years. The difference with reserved instances is no commitment to a specific amount of resources. Yet, the savings can be huge, running up to over 70% or more from the on-demand price.  

Cloud Cost Optimization with Auto Scaling

Users must take time to understand the cloud service offering fully. There is an excellent cloud cost solution in the form of auto-scaling, which the service providers include in the packages. 

Auto-scaling allows for automatically adjusting and monitoring application scales to meet demand. Users can customize this to prioritize the cloud infrastructure’s availability, cost, and performance. 

So, if the priority is cost, set that as a parameter. With auto-scaling, it becomes possible to place performance limits on low-priority workloads that do not need extensive scaling.  

Minimize Data Egress Fees

Cloud users may need to learn that data movement from cloud storage attracts an egress fee. That accounts for up to 6% of cloud fees. It may sound like an insignificant amount when looking at the overall cost. 

The challenge is that the egress costs are unpredictable and can rise anytime. A change in IT strategy, new acquisitions, or data movement will increase the fees. The providers will charge for the data movement when migrating to the cloud.

Cloud cost management requires clarity on transfer fees and taking steps to minimize data transfers.  

Cut Cloud Spending With Cloud Cost Optimization Techniques

Implementing some of the Cloud cost optimization tips we have shared can significantly bring down cloud spending. But the first critical step is a cloud cost analysis to identify areas of greatest spending and what to cut out without impacting performance.