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How to achieve cloud cost optimization during unprecedented times?

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The blog is originally published at Cloud Management Insider.

Financial uncertainty is a real struggle, even when organizations are doing their best. In the present time, there are two factors that brought everyone’s focus on cloud cost optimization. One – the present global financial conditions as a response to the COVID-19 pandemic and second – the accelerating adoption of cloud services.

According to the Flexera 2020 State of the Cloud Report, organizations expect that their cloud spend would increase by 47% in the following year. This leads to a challenge in forecasting the actual budget, where the respondents also reported that their cloud budgets exceeded by an average of 23%.

The IT professionals who took part in the survey, also confronted that nearly one-third of their cloud spend is wasted. These disturbing figures also led 73% of survey respondents to put cloud cost optimization as their top cloud initiative in 2020.

Well, who would have thought that cloud would accelerate at such a great pace that nobody has ever imagined. Most of the organizations are enforcing cloud usage to support other business operations. On the other hand, few organizations are expected to see their cloud usage decrease as their businesses being impacted by the pandemic. In both of the scenarios, it becomes crucial for businesses to optimize cloud costs.

There has been an everlasting trust in the on-demand cloud spend to save money. It can bring you instant savings. However, a focused and well-thought plan can yield better benefits, which can result in 20% to 30% savings in just a few months. This will also prepare your entire organization to manage cloud costs more efficiently than ever before as cloud usage fluctuates up and down,

Here are best practices to help you conquer the slippery cloud cost optimization mountain:

1. Discounts – Assess before putting pen to paper

The discounts offered by cloud providers may seem tempting but evaluate the goals or your usage. See the clear picture, cloud providers are dying to lock in your cloud usage, and your priority is to save every penny.

Cloud providers offer a list of discount options, such as Reserved Instances, Saving Plans, Enterprise Agreements, etc. To avail these discounts, you are required to make contractual commitments that too for over one or three years. You don’t want to sign up for commitments that may lock you into wasted cloud spend and where there are fewer opportunities to cut down cloud costs.

Making a thorough assessment will help you to exactly determine where to optimize cloud spend, and if you need discounts, you can make commitments to the cloud provider.  

2. Cut down ties from the resources that you don’t need

We have told you these hundred times in our different blogs, and this is the best practice to optimize cloud spend. Call your team over a Zoom or Teams meeting and ask them to identify the “zombie” resources that you can get rid of.

Focus on rightsizing the resources. You should be able to quickly identify resources that can be upgraded or downsized to meet the capacity requirements along with cutting down costs. “Cutting down ties from resources” also pinpoints to de-provisioning the unused storage, identifying the latest lower-cost instances, or shutting down instances after working hours.

3. Understand the relation between overall cloud costs and software licenses

The cost of applications that you are running in cloud may be affected significantly by traditional software licenses. So, optimizing the license use while running applications in cloud becomes an integral part of cloud cost optimization.

In a few cases, you can save significantly with “bring your own license” (BYOL). Take a look at an example, Azure Hybrid Benefit can help you garner about 45% savings on VMs running Microsoft Windows or SQL Server in Azure.

While there are few cases where you may end up paying more when operating in cloud. For example, license restrictions on Oracle Database might make your cloud bills heavy while going multi-cloud.

Taking time in understanding how software licenses can affect cost along with what are the restrictions if you go multi-cloud can boost your cost optimization initiatives.

4. If you take our advice, sign-up for a Cloud Management Platform (CMP)

We know that some of you might be saying, “Oh! That’s another dent in our pocket.” But if you really understand the cloud economics, you won’t say no to a third-party tool that helps you monitor your cloud infrastructure, provides visibility, gives recommendations to make better decisions, helps you with robust governance, automation and end-to-end security.

So, if you are new to cloud or already using cloud for a fair long amount of time and struggling to bring down the cloud costs. You should definitely take a look at the CMPs present in the market. Definitely, CMPs will charge you but rather than figuring out on yourself the cloud cost-cutting opportunities and end-up paying more and more for the next few months which results in wasted spend; you can plug-n-play the SaaS-based platforms now to know exactly where you can cut down costs.

Cloud cost optimization is a continuous process

There is no denying that cloud cost optimization is not a one-day task or even weeks or months. It is an ongoing process that will prevail as long as businesses are using cloud services. The root cause of this is the very nature of cloud computing, i.e., the pay-as-you-go model. This has both good and bad sides. Good that in a click, you can provision as many resources as you want and bad because it can live you with huge cloud bills.   

This post is originally Published at Cloud Management Insider 

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