For startups and small businesses, the cloud offers a world of simplified IT maintenance and reduced IT costs. Rather than purchasing expensive infrastructure (i.e. servers) and software licenses or building and maintaining infrastructure from scratch, businesses can get up and running with the cloud in no time. Because the cloud reduces IT maintenance costs by 16.79%, teams can allocate their budget to the things that matter.
For most startups, this is critical. Developers and engineering teams can focus on actually building applications, products, and features. Most businesses, regardless of size, turn to AWS, Microsoft Azure, IBM, and Google as their chosen cloud providers. If you are in this group and go down this route, you could be missing out on potential cloud savings if you’re not incorporating a cloud cost optimization tool.
In this blog post, we discuss the benefits of using cloud cost optimization tools to reduce overall cloud costs. Here’s why startups should invest in cloud cost optimization outside of their cloud provider:
1. Set up a cloud strategy based on cloud cost savings from the get-go
The average startup spends 92% of first-year revenue on customer acquisition. As your business grows following that critical first year, your cloud costs will likely grow as well. One of the biggest benefits of using the public cloud is that you don’t need to worry about what happens in the event that you scale too quickly. Your cloud provider takes care of that for you.
However, if you do scale quickly, then it’s important to be aware of your new cloud spending trends. Even more, if you’re just beginning your cloud journey, then one of the smartest things you can do is to continuously monitor your cloud costs. Cloud cost optimization tools can help monitor your cloud spending and highlight opportunities for cloud cost reduction.
2. Automate routine tasks to focus on growth
By reducing time spent on repetitive tasks, your team’s workflows become more efficient. By leveraging the latest technology used for cloud cost optimization, you can replace certain processes with automation so that you can focus more on business growth. Automation, for example, can generate custom cloud cost reports so that you have a detailed understanding of your cloud spending and cost leaks.
Almost every business, including a startup, that implements a cloud strategy will have idle resources in the cloud, which, over time, can drive up cloud spending significantly. With automation, you can set up processes to eliminate idle resources or shut them down when they are not in use. Cloud cost optimization tools can go a step further with their own proprietary technologies that integrate AI for further cloud cost reductions. Cloud cost optimization tools are ideal for any startup looking to automate tasks related to cloud billing.
3. Understand your cloud spend easily
Even if you’re a business leader in the startup scene with a technical background, it’s not practical to spend hours combing through your cloud bills. If it’s not the CEO overseeing the company’s cloud spending, then somebody else on the team is going to have to take care of it. According to Gartner, 95% of business and IT leaders state cloud billing is the “most confusing element of using public cloud services.”
Each cloud service provider, including AWS and Microsoft Azure, has its own ways of presenting cloud costs and usage reports, which may not always be so clear-cut, causing confusion among business and IT leaders. Instead of expending extra manpower or resources on understanding the breakdown of your cloud bills, cloud cost optimization tools can help eliminate confusion through intuitive dashboards and comprehensive reports so that you can focus more on understanding and implementing better cloud cost saving methods.
4. Gain immediate insight into and alerts on your cloud spend
75% of IT professionals report that there is a “lack of visibility of their cloud resources.” This is a big problem for many reasons; for one, without the proper details you can miss out on potential cloud cost saving opportunities. A well-designed, intuitive dashboard that displays your cloud costs in a comprehendible way and integrates actionable functions would be greatly helpful to cloud users, and a cloud cost optimization tool can provide this.
Like in many industries, AI is becoming the next trend. It is being integrated into cloud cost optimization to offer even more analytics, better reporting and monitoring, and ultimately cloud cost savings. Grumatic, for example, uses AI to study monthly cloud spending to offer personalized action plans to reduce cloud costs.
Final Thoughts
To see just how prominent cloud use is, we can take a look at Pinterest as an example. With photo and video sharing at the forefront of their business, it should come to nobody’s surprise that their cloud spending is on the high side. It is nonetheless alarming to know just how high that number really is; reportedly, they spend a whopping $190 million USD a year on AWS cloud services.
For startups who expect their business to grow need to keep in mind that their cloud costs can skyrocket one day too. So, why not implement cloud cost optimization early on? It is important to continuously monitor your cloud use and spending, which won’t settle all of your cloud issues at once, but rather benefit you and your startup in the long run. Talk to one of cloud cost saving experts here at Grumatic!
