Organizations of all sizes can benefit from cloud cost optimization, and when it is done right, it can save you thousands of dollars.
Even if you aren’t spending millions on the cloud like Apple — approximately $30 million USD per month — you too can lower your cloud costs and tap into savings opportunities you didn’t know existed. To better understand cloud cost optimization and how it works, it helps to first discuss the need for a cloud strategy.
Importance of a cloud strategy
Simply migrating to the public cloud doesn’t always translate into the cloud cost savings that your business may be hoping for. It’s possible you’ll end up spending on unnecessary infrastructure that will surely be reflected on your monthly cloud bills.
That’s why having a cloud strategy is critical. To avoid cloud sprawl[1] , you can’t just pick up what you have in your previous infrastructure and put it into the cloud without a set plan.
Moving forward, you should recognize what it is that you’re moving to the cloud, why you’re moving it, and how you’re going to govern it. By clearly defining and outlining the role of the cloud in your organization, you end up with a precise analysis of expected cloud benefits and ways to reduce certain risks associated with the adoption of cloud services.
Without a cloud strategy, you put your organization at risk of poorly configured cloud environments and missed opportunities for cloud cost optimization in the future.
Cost optimization in traditional environments vs cloud cost optimization now
Cost optimization has naturally changed over the years with the rise of cloud computing. In traditional on-premise environments, you’d buy a server and only worry about the initial infrastructure setup fee and maintenance costs. Costs were fairly predictable.
Buying software meant buying an enterprise license where the entire instance of software resided in your on-premise environment. You’d also be responsible for the costs associated with managing and maintaining all the solutions and software, which run higher than when in a cloud environment.
Cost optimization is the number one reason for cloud migration for 47% of enterprises. Now with the cloud, you can get access to resources in minutes. Plus, you only have to pay for the resources you need. However, while migrating to the cloud in itself has some cost benefits, managing cloud bills can get unpredictable because you may be overspending on cloud resources you don’t actually need.
The use cloud cost optimization tools
Cloud bills can be quite overwhelming and can contain thousands of lines of incomprehensible billing items. Cloud cost optimization tools can help you understand these costs so that you can make better decisions on cloud spend. Services like Amazon Web Services, Google Cloud, and Azure have native tools that offer analytical reporting, but they may not offer the advanced visibility you need.
Cloud cost optimization tools can offer that much-needed visibility and more. Cost intelligence data is needed, especially to see if cloud resources are being used optimally. There are also cloud cost optimization tools that can provide actionable insights specific to your cloud spending patterns.
It’s important to note that traditional cloud cost optimization tools and software are not replacements for cloud strategies. Even with a cloud cost optimization tool you will need to know what you’re going to be optimizing. A cloud strategist would say that knowing your goals matters most when it comes to cloud cost optimization.
When to start optimizing on your cloud spend?
Even if you are well along your cloud journey, it’s not too late to develop a cloud strategy. Cloud cost optimization should be a continuous process due to the dynamic nature of the cloud.[AB2]
The optimization process does not consist of one-time actions such as removing unused assets. It’s highly recommended that you develop a cloud strategy that addresses current costs and any future costs.
Final Thoughts
To reiterate, cloud cost optimization is not a one-time project but rather a continuous process. [AB3]
That’s not to say that cloud cost optimization requires daily maintenance but it should be on your radar and can be made easier with cloud cost optimization tools and software[4] .