In recent years we have witnessed the great migration to the cloud with promises of saving space and saving money. However, some businesses are not seeing the cost savings they were promised. The cloud can be a major cost saving tool, but you need to manage it right. There is often a disconnect between financial teams paying for the service, the engineers deploying it, and the needs of the business teams relying on it, which can lead to paying for unused or unnecessary cloud services. So, how do you effectively manage your cloud costs and really start to see the savings? Let’s find out!
What is Cloud Cost Management?
First and foremost, what does managing cloud costs even mean? Cloud Cost Management, also known as Cloud Cost Optimization, is a strategy for monitoring and planning cloud usage to create a cost-effective and well-functioning cloud environment for your business. This includes monitoring how and when different aspects of your cloud environment are used and identifying where you may be able to scale back. For example, you may have an instance running 24/7 when you only need it to run during business hours. From there, you can schedule or automate service shut off for the weekends and overnight. When you start to optimize your cloud usage, you can start finding new ways to save.
What are the Difficulties with Implementing Cloud Cost Optimization Strategies?
A common misconception of the cloud is that it leads to instant savings. Unfortunately, this is usually not the case. (Frustrating, we know.) It takes time, money, and some reconfiguration to get through the migration process. Sometimes you even need to rebuild apps to fit the cloud framework, which means you are paying for it twice until migration is complete. Many companies will not start seeing savings until 4-6 months after beginning the migration process. So, if you don’t see cost savings right away, give it time.
However, during the process of migration and after, you can track your cloud activity to pinpoint areas costing you more than they should. If you are a Microsoft user, Microsoft’s Cost Management features can be turned on from your Azure portal and can be accessed within 48 hours. With just a few clicks, you can start tracking your Azure spending and usage.
Easier said than done, right? It can be difficult to make decisions about where to cut back, what to consolidate, and what to completely remove. If implementing a Cloud Cost Management strategy feels overwhelming, consider working with a Cloud Solution Provider (CSP) to help with implementing, managing, and making decisions surrounding the cloud. Some providers, like PEI, offer cloud consulting services to discuss cost management solutions.
What are the Advantages of Cloud Cost Management?
There are many benefits to Cloud Cost Management, but let’s look at four key advantages:
Cost Savings: Not to state the obvious, but the purpose of cloud cost optimization is to save money. Once you know what you are paying for versus what you are using, you can adjust accordingly.
Maximize Cloud Usage: Cloud Cost Management requires an understanding of your cloud usage. Once you know what services you are using, you can alter your cloud environment to meet your needs. This could look like cutting out unused services, consolidating, or scaling instances to create an efficient cloud environment.
Common Understanding of the Cloud: We started off noting the gap between finance paying for the cloud and the engineers deploying it. Cloud Cost Management helps to bridge this gap so both sides understand what is being used (or not used) and what is being paid for. This helps to eliminate a common disconnect that prevents each side from seeing the true benefits of the cloud.
Predictability and Scalability: Understanding how your business uses the cloud can help you predict costs and scale your cloud resources to meet your varying needs. For example, H&R Block works with Microsoft Azure to scale up their server capacity during the height of their busy season and scale down for the remainder of the year. Cloud Cost Management offers scalability and predictability to H&R Block so they know what they need, when, and how much they will pay for it.
What are Strategies for Cloud Cost Management?
There are plenty of ways to approach Cloud Cost Management, but many strategies fall into four categories.
Shut Down Idle Resources: There’s no need to pay for unused resources. Shut off unused resources such as VMs or ExpressRoute circuits if you work with Azure. These idle resources could save you on your monthly bill.
Reconfigure and Consolidate: If you have resources that are underused in your cloud infrastructure, consider ways they can be reconfigured to save money. Another option is to look for ways multiple resources could be consolidated into one. This will ensure you are only paying for what you need.
Schedule Resources: Your business likely does not need all instances running all hours of the day and night. Rather than letting them constantly run, schedule them to run only when you need them.
Create and Manage Budgets: Create budgets for your cloud expenditures and track your usage so you know how much you are actually paying for services. You can scale your budget and your usage accordingly, so you don’t break the bank.
How Do You Get Started?
You can always get started with Cloud Cost Management on your own. There are plenty of resources available to help you along the way!
For Azure and AWS users, Microsoft Cost Management is a great place to start. Even better, it is free with Azure! The following tools are available in your Azure portal for no additional cost:
- Data Enrichment
While this is a great tool, managing the cloud can be difficult to do on your own. That’s why Cloud Solution Providers like PEI are here to help. PEI’s Azure Optimization Workshops pair our customers with certified Azure Solutions Architect Experts to examine your existing cloud architecture and identify strategic opportunities to optimize, automate, and consolidate key areas of your environment:
Security: PEI will identify workloads that don’t follow industry best practices and recommend Azure solutions to provide additional insights into threats with increased control over security processes.
Reliability: Our cloud experts can review resource versioning and advise on known issues and remediation paths, ensure that business-critical data is available and protected against accidental deletion or corruption, and identify both single points of failure and fault tolerance levels across workloads.
Operational Efficiency: In our workshops, we’ll examine workflow efficiency, resource manageability, and deployment of best practices.
Performance: Work with our engineers to determine opportunities to improve speed and responsiveness of business-critical apps, optimize CPU resources and memory utilization, track scalability limits, proactively review VPN gateway traffic, and more.
To get started with an experienced Cloud Solution Provider, or if you just have questions about Cloud Cost Management, we are available to talk! You can contact us online, or give us a call at (303) 786-7474.
Anna Ross, PEI