How to Optimize the Cost of Cloud Computing

In a nutshell, cloud cost optimization is a process of reducing your overall cloud spendings. This process includes different stages for identifying mismanaged resources, eliminating waste, reserving capacity for higher discounts, and right-sizing your computing services to scale.
cloud cost optimization

The cloud provides manifold benefits to organizations like unlimited scalability and lowered IT costs. But unfortunately, the truth is that most cloud providers charge cloud customers for the resources they order, regardless of whether they use them or not.

In a report from 2020, Gartner analysts Brandon Medford and Craig Lowery estimated that nearly 70% of cloud costs were wasted. Along with that, they also introduced a series of factors that increased the complexity of managing costs of the public cloud and a guidance framework to work around it.

Must Read: Hybrid Cloud Computing is the New Strategy to Accelerate the Adoption of AI

Now, when we talk about optimizing costs, there are a lot of tools and techniques that organizations can use. But since tools can only take you so far, and the intersection of executive teams, project leads, finance, and site reliability engineers (SREs) all come into play when it comes to cost optimization, today we’re going to tell you a few principles that all organizations can follow to assure that they make the most of the cloud.

1. Discover and Remove Unused Resources
The first and easiest way to optimize cloud cost is to look out for unused resources. That’s because most often administrators or developers spin up temporary servers to perform a function, and forget to turn it off after the job is done. Other than this, the administrator may also sometimes forget to remove storage attached to instances they terminate.

These are things that happen frequently in IT departments across all companies. But the result is that the organization’s bills include charges for resources they once purchased, but are no longer using. So, to optimize cloud cost you should start by identifying such unused and completely unattached resources and eventually remove them.

2. Identify and Consolidate Idle Resources
Addressing idle resources can be your next best practice for cloud cost optimization after discovering and removing unused resources. That’s because an idle computing instance has a CPU utilization level of 1-5%. So, when an enterprise is billed for 100% of the computing instance, it is a huge waste.

Identifying such instances and consolidating computing jobs onto fewer instances seems like a worthy target. This is also because when administrators operate at low utilization, they are able to save some headroom for a spike in traffic or a busy season. If not, then it becomes difficult, expensive, and inefficient to add new resources to the data center. So, in order to actually cut down cloud costs, your organization can use cloud offerings like autoscaling, load balancing, and on-demand capabilities which in return help in scaling up your computing powers at any given time.

Also Read: The 4 Cloud Deployment Models – Their Advantages and Disadvantages

3. Employ Heat Maps
Heat maps are again, important mechanisms when it comes to aiming for cloud cost optimization. It is a visual tool that shows peaks and valleys in your computing demand. With this information, your organization gets the ability to establish start and stop times in order to reduce costs.

Just to cite an example, heat maps can be used to indicate whether development servers should be shut down on weekends or not. This saves cost in an enormous manner. And while such settings can easily be done with manual efforts, the better option is to leverage automation.

4. Right-Size Computing Services
This is an important process that comprises analyzing computing services and modifying them to efficient sizes. Thus, called ‘Right Sizing’. Now, the fact is that it is extremely difficult to size instances correctly when cloud administrators have over 2 million possible combinations to choose from. That being said, you must also look for options like servers optimized for memory, database, computing, graphics, storage capacity, throughput, and more. Right-Sizing tools help with cloud optimization by achieving peak performance from the resources you pay for.

5. Leverage Spot Instances
Spot Instances are very different than RIs but help you in saving more on your cloud spend. Did you know Spot Instances are available for auction? That’s right, and if the price is right, it can even be purchased for immediate use. However, such opportunities only last for some time because they are the eye candy everyone in the industry is looking out for. They are best suited for computing cases like batch jobs and jobs that can be terminated quickly.

Conclusion: The cloud holds great potential, not just today but even throughout the unforeseeable future. This is why the need to save costs on cloud spending is important. And the promise of saving money while using the cloud can only be achieved, as long as you give the right attention to cloud cost optimization. It’s not a checklist but a mindset that helps you in staying on the right track.

Recommended Read: What is Cloud Migration and What are its Benefits?

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