Controlled Cloud Costs = Faster ROI

Cloud Costs

Back in 2017 AWS admitted that about 37% of cloud spending goes to waste. Following this, in 2020 Gartner estimated that the public cloud market would grow to $257.9 billion that year. Looking at these numbers makes it clear that organizations are collectively wasting around 90.8 billion in public cloud spending. 

While the cloud providers are not complaining about this, organization budgets most certainly are. Most organizations are looking at bringing down exploding cloud bills and reducing costs tangibly. 

How organizations can control their cloud costs

Much like how we don’t want our personal expenses to blow up and remain within what we can control, keeping the cloud spend under control is also essential to get faster ROI on cloud investments. Here are a few ways to ensure that 

Identify unused resources 

The ease to spin up resources in the clouds is a boon but can quickly become a bane simply it is very easy to forget that these resources exist. Development teams, for example, are usually focused on accelerating the speed of development. To aid this they can spin up an instance to test an application. If this instance keeps running even when not in use then these unused instances will hit the wallet at some point or the other.

Thus, identifying unused resources and removing these resources from the cloud help in keeping the cloud bills down. Sandboxing the environment to ensure that compute instances are cleaned up or shut down when they are no longer in use also is an important step.

Inadequate resource utilization 

Inadequate resource utilization is another reason why cloud costs escalate and build the RoI chasm. To avoid this, organizations need to use compute resources adequately to avoid idle costs. In container environments, for example, developers can employ Kubernetes to manage and allocate compute resources to resources like nodes, or pods. While it is fairly common to specify the resource limit in terms of the amount of CPU usage and memory that an application will need within an ecosystem, idle costs can emerge where applications do not use up all the reserved resources or if resources are over-allocated. Empty environments, clusters, etc. all contribute to these unallocated costs and impede RoI.

Getting transparency on application performance, computer, network, memory, and storage consumption can help organizations optimize resource allocation. With this clarity, organizations can reduce unallocated or idle costs and improve RoI. 

Mountains of worthless data 

Thanks to the cloud, organizations can now store and analyze volumes of data that were previously unimaginable. Today, almost all organizations are focused on how to improve their capacity to harness and store data. In this tryst, most organizations go on storing copious amounts of data, not all of which is needed.

Many organizations, for example, store all incoming data. To avoid cluttering up their internal data center, they transfer the unused data to the cloud. This data can keep adding up and contribute to costs that can be completely avoided. 

Organizations also have to evaluate their disaster recovery strategy. They have to devise measures to manage snapshot lifecycle and set the right lifecycle policies so that the snapshots keep piling up and over time end up eating a lot of storage space and thereby keep cloud data storage costs under check. 

Monitoring the data in the cloud, evaluating what data is needed or can be valuable in the future, and getting rid of what is not needed can reduce, and consequently optimize, cloud spend.   

Applications that are not cloud-optimized 

To get applications to the market quickly, organizations need to remove the operational complexity of the app to the platform. Cloud-optimized applications are a response to this growing need and give organizations the agility they need to survive in this competitive marketplace. 

Organizations need to focus on optimizing applications by refactoring to improve performance. It can help them avoid charges associated with accessing storage for a read or write and make sure that costs don’t overshoot the advantage matrix. Determining the optimal compute levels, storage, and memory needs of the application also eliminates wastage emerging from overspending on capacity or configuration. 

Identifying the service level profiles of the applications to balance service levels with default cloud instances and evaluating the cost of cloud instances against service levels required for different applications drive optimization. Fine-tuning auto-scaling rules and database row optimization are also important when optimizing applications for the cloud to drive efficiencies of performance and finances. 

Application design considerations

Paying close attention to the application design and making sure that the same is optimized for the cloud goes a long way in controlling cloud costs. Cloud applications have to be designed differently and have to carefully consider the design forms. Instead of creating a big design up-front and providing a full allocation of resources, it is more prudent to design them keeping horizontal scalability in mind. During this phase, it is also wiser to under-provision and then scale up according to requirement rather than provision for peak loads upfront.

Cloud costs can also be checked by deeply understanding how each factor impacts the price of each resource. Organizations need to consider elements like tiered storage classes, provisioned IOPS, burst compute, Lambda/Functions, etc. to bring in the optimization of costs.

Incorrect cloud choices 

“Which is the cheapest cloud service”? This question is similar to asking a doctor “is this case serious?”. Incorrect cloud choices, determined solely by the lowest price can impact the RoI negatively simply because the solution might not be the right one for the organization.

The choice of the right cloud depends on which cloud service the organization will use and how often and according to the needs of the application such as availability, scalability, performance and compliance needs, etc. 

In Conclusion 

While one of the biggest draws of the cloud is lower costs, the cloud is not free. Neither is it cheap. However, by making the right cloud choices and managing the cloud well organizations can control their cloud costs easily and get a faster RoI. This road might feel like it is peppered with some bumps, but such bumps are common, even normal, especially for a massively disruptive technology like the cloud which has turned our world over completely. 

This article was originally published at Industry Outlook Magazine
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