Guest Article

Cloud Cost Management – 6 Actionable Steps to Lower Your Cloud Spend

Most of the time, IT departments are anxious about their increasing cloud cost, especially when they are working with AWS, Azure, or GCP on a daily basis. The best way to eradicate this problem is to have a strict practice of cost management for every single resource created in the public cloud.

There are many different aspects to consider. In terms of strict optimization, here are a few places to start.

1. Deploy Cloud Resources on a Small Scale – Only pay for what you use

Most of the time, companies tend to purchase more storage arrays or compute nodes than they actually require. It is wise not to purchase additional resources if your applications or workloads don’t really need them. Also, not having excess cloud resources allow you to measure and predict the performance of your environment better and help to analyze cost savings. To start this, it would be prudent to go for a Pay-as-you-go model, which will enable the users to assess the requirement more appropriately.

2. Resource Tagging – Apply labels to accurately track resources

Resource Tags are simply metadata labels that are assigned to your resources. Tagging allows you to attribute the costs of each resource to the specific business area, even when the resources are not in use. When you have specific goals defined, the tags will help you to predict and measure your environment to further lower cloud compute costs.

3. Reserved Instances – Measure, then pre-pay for compute costs

Reserved Instances is a discount billing concept in which businesses can obtain significant discounts in return for committing to a specified level of usage. The discount terms, however, vary from provider to provider. The benefit of reserving an instance instead of going with an on-demand model is that the hourly compute costs are significantly lowered. However, going for Reserved Instances will be possible only when the company is able to predict its usage levels or else the commitment would result in extra costs if not consumed.

4. Cloud Monitoring – How to monitor your cloud environment

Cloud monitoring allows you to identify, manage, and improve the status of your cloud-based resources by using cloud-native or 3rd party measurement tools. Initially, your cloud spends will increase because you are adding additional services. Over the time, with cloud monitoring, you will be able to pinpoint the exact sources of excess cost and take action to lower or remove them.

5. Cloud Monitoring Tools – Which tool is best for you?

There are many cloud monitoring tools in the market today. Choosing the right tool depends on your specific business needs and long-term goals. The two most common cloud-native tools are Amazon CloudWatch and Microsoft Azure Monitor. Regarding 3rd party tools, it is important to have a detailed understanding of your specific requirements before making a decision. Monitoring solutions will vary by price, functionality, and size of the environment being monitored.

6. Hiring a Partner – External dedicated expertise

Many organizations do not have the bandwidth or the headcount or the expertise to effectively manage each portion of their cloud environment, especially in a multi-cloud setup. Unless you have the appropriate resources, hiring a partner is the best recommendation. Many partners will have dedicated resources that are specific to each cloud provider, which allows them to pull the right technical architects for a particular problem.

While there isn’t one answer to keeping cloud costs low, the best you can do is to keep a proactive approach. Focus on gaining short-term wins while setting up for success in the long term.

By: Rajendra Chitale, CFO, Crayon Software Experts India

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