Cloud services have proven their merit in the market, especially after the pandemic, when everything went digital. But a lot of CXOs are worried about cloud cost management, which is what stops them from committing to the cloud. If you’re already on the cloud, it can seem like you’re leaking money, but it’s often because of unutilized resources. According to Fortune business insights, cloud computing is a half a trillion dollar industry, the market was worth $480 billion. Its benefits range from saving money by improving your team’s efficiency to making scalable IT services more accessible to your business. Businesses are expeditiously shifting to the cloud; 94% of enterprises use cloud services and the cloud cost management solutions vary based on what level of cloud services a company has adopted.
Early-stage companies, who are just setting their foot in the door, should start exploring cloud services, be it in data, computing, or applications. The best way to take advantage would be to become cloud-native. With a coherent plan of action and a detailed cost-benefit analysis, you’ll be able to reach your target. It’s a good idea to align your cloud management process with your business objectives. The first step for organizations that have been in the industry for a long time and are now considering shifting to the cloud should be to create a roadmap for the first five years of their cloud journey. Understand your use case thoroughly and perform due diligence in the market. You will need a solid change management plan that will ease the cloud migration process. You can start by opting for free trials of the tools you wish to use and trying not one but multiple vendors, which will allow you to better comprehend your cloud needs. It is imperative to pick the right time for cloud migration.
For companies who have already been using the cloud but are finding it difficult to stay on budget, we have an array of cloud cost management tips that will help you stay on budget and reduce those hefty bills that the cloud accrues.
Choose reserved or spot instances: A lot of platforms allow you to pick unused capacity at cheaper rates. Amazon EC2 Spot Instances, Azure Spot VMs, Google Cloud Preemptible VMs, and Google Spot VMs allow you to bid for spot instances and get them at discounts compared to on-demand prices. Reserved instances, on the other hand, require you to pre-emptively commit to a set number of instances over a one to three-year period. You can save around 90 percent by using Amazon EC2 Reserved Instances (RIs), Azure Reserved VM Instances, and the Google Cloud Committed Use program.
Capacity Planning: Finding the right amount of capacity is integral to cloud cost management. A lot of digital businesses end up paying extra because they are not using all their instances. You need to cautiously figure out how much you need so that you can handle unsuspected fluctuations in traffic but also be wary of wasting money on excessive resources. Be it unallocated VMs or Dev/test infrastructure that’s not being used outside business hours, getting rid of unused resources will greatly reduce your bill. A way to right-size your capacity is by utilizing autoscaling options like AWS Auto Scaling which automatically monitors and modifies the scale of your application.
Turn VMs into hosts for containers: Due to underutilized servers and a lack of space for new racks, enterprises converted some dedicated servers in their data centers into VM hosts. As the issue of memory utilization in VM hosts arose, they converted some of their VMs into container hosts. Containers require one-third of RAM when compared to VMs, and since RAM is a costly asset, choosing containers can greatly shrink your cloud costs. AWS lets you run containers free of charge as you only pay for storage and VMs while Azure allows you to use containers from an existing collection costing $0.0025 per instance created, plus $0.0000125 per GB-second and $0.0000125 per core-second.
Opt for serverless cloud computing: Cloud cost management can also be done by using Function as a Service where you wouldn’t have to use a server. In this paradigm, you create and define a function that will run on demand, through triggers created by you, while also setting memory allotment for your defined function. The cost of serverless cloud computing depends on how many triggers you create, how much memory is used, and the time taken for execution. Platforms like Google Cloud Functions, AWS Lambda, Azure Functions, and Bluemix OpenWhisk, offer you these services where you don’t have to be concerned about scalability.
Use cache strategically: Top-tier cloud storage isn’t cheap. To evade this, you can avail memory-based caching services provided by platforms like AWS ElastiCache. Instead of the long-drawn process of extracting data from storage instances, the cache can access data closer to the compute instance, in-memory. This lowers the cost, especially while running workloads in remote regions, and enhances the performance of applications. Another option is the facility of choosing where your data is geographically stored, provided by Google’s cloud storage.
Choose the right time for computing: The cost of cloud computing differs from time to time. The demand at peak times leads to a higher cost. So, for cloud cost management, you should run workloads at certain times based on different geographies for making it cheaper. The workload will only notice a latency difference between service areas, but only if common storage services can support each location. However, security and regulatory compliance may prevent workloads from running in certain regions. Having a support system as a technical consultant can help an organization make better decisions when it comes to cloud computing.
‘We are saving too much money through planning’, said no one ever! Always stay on budget because with a little finesse and the right set of tools, you can stay in control of your cloud budget and still achieve your goals. Here are some more tips to keep you in charge of your cloud expenditure.
Employ these practices to stay on top of your Cloud Cost Management game
Reduce costly data transfers
Tag your resources
Perform annual audits
Use Real-time data for cloud cost optimization
Adopt pay-as-you-go model
Cloud cost management tools have answers to a lot of budget problems of cloud computing. They have the capacity to alter your bills by following the set of instructions curated by you. Here’s what you could achieve by opting for a good cloud cost management tool:
- Create Auto stopping rules: This feature can be used to shut down VMs and containers that are not under use while they run on spot instances, hence decreasing the cost. This is a dynamic feature and resource allocator, especially for non-production workloads. It can detect idle times automatically without creating any concerns about spot interruptions.
- Detect cost anomalies: One can configure triggers that warn you when there is an unexpected and substantial increase in cost, guiding you to the area that might need your attention. This feature helps you identify the areas causing wastage or sudden charges.
- Fix Schedule: Cloud cost management tools also have the capability of fixing a schedule based on your uptime and downtime. Finalizing a schedule and allowing certain teams to use one resource at a time can also help in shrinking cloud costs.
- Configuring budgets and thresholds: Using cloud management tools, you can set up budgets for specific teams or projects based on a forecasted cost and if your cloud spend goes beyond, it will trigger an alert.
Top Cloud Cost Management Tools in the market
Depending on what stage your organization is in the market, your necessities and expectations from the cloud would differ. The later-stage companies who have already invested in the cloud or have an established in-house engineering team might need a more extensive approach to cloud cost management. A Cloud Centre of Excellence can be the holy grail of cloud-focused companies. A team that has a CIO, CTO, database engineer, operations manager, network engineer, etc., where they can collaborate meaningfully and do all things cloud. They should be able to identify areas for cloud cost management while figuring out the exigencies and understanding the need of the hour. Since privacy and security have always been a concern with the cloud, having a center of excellence will help you restrict data access and provide it only to those who have experience and decision-making power.
Speaking about decision-making power, did you know about TED, the engineering dashboard? TED is an AI-powered value stream intelligence platform from Qentelli that helps you visualize metrics in your business and software value streams. Its job is to offer intelligent data correlation that drives engineering efficiencies and adheres to compliances.
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