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8 Guaranteed Strategies That Will Help You Optimize Your Cloud Cost Management

Cloud cost management is growing in popularity. According to Gartner, worldwide end-user spending on public cloud services is predicted to grow 23.1% in 2021. More businesses are expected to move their operations to the cloud. 

And for good reason, cloud providers are adding more functionality to their cloud platforms. They have made moving to the cloud cheaper and more efficient. IDC has shown how the spending on traditional IT infrastructure has reduced since 2019 and is predicted to continue reducing through 2024. In contrast, spending on both private and public cloud has increased.

When organizations move to the cloud, they get many benefits, including efficiency, better performance, and decreased costs (more on benefits later). However, to realize the benefits – especially cost benefits, cloud users and organizations need to make sure that they use cloud resources wisely. Many organizations are spending a lot of money on resources that they don’t use. Forbes magazine estimates that at least 30% of cloud spend is wasted.

In this blog, you will learn about cloud cost management. The blog will show you what causes high costs and 8 ways to reduce cloud costs in the lower sections.

What Is Cloud Cost Management?

Cloud cost management is systematic planning that organizations use to understand and manage the costs of cloud technology. Thus, it’s a way of finding cost-effective ways to maximize cloud efficiency and reduce cloud spend.
Since cloud infrastructure is becoming increasingly more complex, the pay-for-what-you-use model is challenging to track. Therefore, cloud cost management is critical. When implemented correctly, it can result in significant savings.

Advantages Of Cloud Cost Management

Decreased Costs

Decreased costs are the first advantage that you’ll notice once you start doing cloud management. How does this happen? By closely managing your cloud spend, you avoid overspending on cloud resources. Overspending is a critical issue affecting companies globally. Gartner estimates that companies unaware of the mistakes made in their cloud adoption will overspend by 20 to 50%.

When purchasing cloud resources, you get discounts based on pre-payment or volume; this is another way you save money.

Predictability

Businesses can estimate their cloud spend and thus plan their budget. Cloud cost management helps businesses prepare and plan for the future. A business that correctly forecasts its cloud computing needs has a clear advantage over its competitors.

Efficiency

Businesses that look closely at their cloud spending can reduce their spending and increase their efficiency. How? They can reduce resource waste and take advantage of cloud technologies that enhance efficiency, e.g., load balancing and automatic scaling (more on this later).

Better Performance

When organizations take advantage of cloud cost management, they should take great care when choosing cloud resources. They should only choose resources that are the right fit for the needs of the organization. This is a cost management tactic called right-sizing (more on this later). 

Overprovisioning – which means getting very powerful cloud resources, should be avoided because it means overpaying. On the other hand, under-provisioning means getting less powerful cloud resources, which can cause performance to suffer. There is a delicate balance between the two. With careful planning and right-sizing, businesses get smooth performance without increasing their cloud costs.

Visibility

Cloud cost management will help your organization get more visibility into its internal workings. Why? Because It’s impossible to practice good cloud cost management without detailed visibility into your organization’s cloud usage and cloud architecture. This visibility will help you in other areas, e.g., governance and security—a perfect win-win situation.

Factors That Contribute To High Cloud Costs

Unplanned Migration

Most businesses don’t want to be left behind by their competitors. They will want to migrate to the cloud when they see their competitors doing the same. They may not be ready to move to the cloud leading to an expensive learning experience. 

To combat this, organizations should make sure that they have a plan that clearly outlines the impact and cost of moving to the cloud. Next, they should compare the cost of the cloud with on-premises operations.

Misconfiguration Mistakes

Organizations that sign up for cloud services need to know the pros and cons of each configuration of their choice of resources. 

Otherwise, they find that they may implement a certain configuration only for it to become more expensive than expected. Gartner estimates that 80% of companies unaware of the mistakes made in their cloud adoption will overspend by 20 to 50%.

When migrating to the cloud, always make sure that every bit of data that’s transferred or stored is taken into account.

Types of Resources

Depending on your needs, cloud resources such as compute power, storage amount, memory and network traffic could be costly.

Cloud Cost Optimization Strategies

  1. Describe the Problem

First, you need to understand where the issue is. This means describing the general nature of the problem, the negative impacts, and how it comes about.a

When describing the problem, focus on the primary issue, which is wasteful cloud spending. Next, focus on the resulting secondary issue that excessive cloud use is causing to the environment.

You should also understand where cloud waste happens in the organization. This means drilling down to specific departments, groups, and roles to find out who is responsible.

  1. Create Organizational Strategies

After defining the problem, create a strategy that outlines precisely what you plan to do and what you will do. The strategy should include solid steps such as creating budgets and setting policies around cloud usage.

  1. Deploy Monitoring and Notification Tools

You need to take advantage of cloud monitoring tools. These monitoring and notification tools help you to know when something is going wrong. Depending on your provider, you can get notified when something is about to go wrong or when it’s happening.

Notification tools may notify you:
– When you exceed your monthly spending limit
– When you violate policies
– When you infringe on security policies
– On the number of resources remaining (e.g., instances and storage) after a certain period.

  1. Automatic Scaling

As mentioned earlier, automatic scaling lets enterprises use more resources when the need arises and fewer resources when demand is low. 

It’s a sure way to reduce cloud expenses since you’ll only be using more resources when it calls for them instead of constantly using them.

  1. Power Scheduling

Power scheduling lets you shut down instances that are not used 24/7. You could shut down Non-essential instances during the weekends or overnight. This option is much cheaper than running them constantly.

  1. Removing Unused Resources

Removing unused or unattached resources is one of the easiest methods to reduce your cloud costs. Unused resources are usually created by R&D department teams who initiate cloud usage then forget to terminate it once they are done with it.

Another cause may be that the administrator may terminate instances and forget to remove storage attached to those instances. The organization ends up being billed for resources that they once purchased but are not using. 

  1. Right-sizing

Right-sizing involves analyzing instance performance and your usage needs. Using the information from the analysis, you turn off idle instances and remove overprovisioned or under-provisioned instances. 

As mentioned earlier, right-sizing helps you get the right instance for your needs, saving you money in the process.

  1. Billing From One Account

Having one account billed by your cloud provider makes it easier to catch errors and easily track your cloud spend instead of having multiple accounts. Also, when using one account, you can take advantage of discounts given by cloud providers.

How Ceeview Can Help in Effective Cost Management

Monitor Cloud Costs

Moving your business into the cloud results in many advantages. However, one of the biggest challenges is finding a simple and intuitive way of controlling your cloud costs. The pay-as-you-go model used by cloud providers is complex, and cloud cost and resource usage can be hard to control.

However, with the Ceeview cloud monitor, you will always be in control of your cloud cost. How? Because Ceeview is built to address the complexity of managing cloud costs in multi-cloud environments. You get to control your costs easily using out-of-the-box dashboards with aggregated cost and cloud health data. 

For those in need of comprehensive analyses, there is drill-down functionality into insightful dashboards and reports with detailed information. 

Ceeview cloud monitor will also notify you of potential cost savings.

Monitor and Optimize Resource Costs

As mentioned in the cloud cost optimization strategy earlier, monitoring idle instances is key to reducing cloud costs. 

Ceeview helps you by monitoring resource usage to detect underutilized and idle instances. You then have the option to remove or disable these idle resources.

Cost Forecasting

You can now easily plan your budget with no worries since the Ceeview cloud cost forecasting feature helps you easily predict future costs on a monthly or yearly basis.

Health Monitoring

With Ceeview, you get notifications of your cloud health environment. This helps you to always know your cloud performance. Your clients get a better user experience since there’s no service disruption.

Root Cause Analyses

When your cloud runs into performance issues, Ceeviews root cause analyses will help you know and understand why the issue happened and where it came from. 

Ceeview will also give you a detailed event analysis.

Multi-Tenant Support

Ceeview can help enterprises and managed service providers (MSPs) to manage their customers and divisions.

Multi-cloud Support

Ceeview supports major cloud providers such as Amazon AWS and Microsoft Azure.To learn more about Ceeviews Cloud Cost Monitoring and Optimization, read the detailed features here.

FAQs

What are the Advantages Of Cloud Cost Management?

The advantages of Cloud Cost Management are; Decreased Costs, Predictability, Efficiency, Better Performance and Visibility – It’s impossible to practice good cloud cost management without detailed visibility into your organization’s cloud usage and cloud architecture.

What Factors Contribute To High Cloud Costs?

The factors contributing to high cloud costs are:
1: Unplanned Migration – Most businesses want to migrate to the cloud when they’re not ready.
2: Misconfiguration Mistakes – Organizations need to know the pros and cons of each configuration of their choice of resources.
3: Types of Resources

How can I Optimize Cloud Costs?

You can optimize Cloud Costs by;
1: Describe the Problem
2: Create Organizational Strategies
3: Deploy Monitoring and Notification Tools
4: Use Automatic Scaling
5: Use Power Scheduling
6: Remove Unused Resources
7: Use Right-sizing
8: Do Billing From One Account

How Can Ceeview Help in Effective Cost Management?

Ceeview can help increase cost management effectivity in the following ways; Monitor Cloud Costs, Monitor and Optimize Resource Costs, Cost Forecasting, Health Monitoring, Root Cause Analyses and Ceeview Helps Managed Service Providers (MSPs) to Manage Their Customers in addition to supporting most of the Major Cloud Platforms

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